In recent years, in the European landscape, the cities preferred by startup founders have remained virtually the same, with London and Berlin taking the top two spots by a narrow margin. But why?
Article written by Nicolò Joswig.
The choice of the city in which to establish one's startup has always been a topic of debate for founders worldwide, with Europe witnessing a consolidation of certain cities in the top positions in recent years. But what are these cities, and what reasons crown them as European "startup capitals"?
According to the 2023 "Startup HeatMap Europe" research by DEEP, the top 3 hubs favored by founders for starting up, consistently over the past 5 years, are London (1st), Berlin (2nd), and Barcelona (3rd). Specifically, the top two cities leading the rankings, London and Berlin, are chosen as preferred destinations by 34% of founders, followed closely by Barcelona and Amsterdam (4th), chosen by 17% of European founders.
In the top 10, we find Paris (5th) and Lisbon (6th), chosen by 12%, Munich (7th), Tallinn (8th), Stockholm (9th), and Zurich (10th). But why are these destinations considered "preferred"?
Firstly, due to the attractiveness of major European capitals, both in terms of reputation and the availability of talents and skills. It is well-known that major cities have always offered a greater and more varied supply, attracting the best talents and skills from various countries. According to the Startup Heatmap 2023 survey in Western Europe (Germany, France, Switzerland, Austria), 33% of founders live away from home, seeking opportunities.
Furthermore, the possibilities for networking and synergies with other startups, especially successful ones, are much simpler in major cities. Among the top 5 cities in DEEP's ranking, there are more than 90 unicorns, just under 2/3 of the total European unicorns. In particular, London stands out with 39 unicorns out of the UK's total of 49, and Berlin with 21 out of Germany's total of 30.
More importantly, the availability of capital and funds makes London and Berlin undisputed leaders in Europe. In particular, according to the 2023 "Global Startup Ecosystem Ranking" by Startup Genome, London would be the second-best destination in the world, alongside New York and second only to Silicon Valley, for access to funds and growth opportunities. In terms of accelerating startup growth in Europe, the top 5 positions go to London (1st), Berlin (2nd), Zurich (3rd), Paris (4th), and Amsterdam (5th), with slight variations from DEEP's overall ranking.
London, Paris, and Berlin also emerge as cities with the strongest leadership positions for technological trends and capital raised through Crowdfunding (Kickstarter Campaigns 2022). Despite occasional changes in follower positions (cities ranked from fourth to tenth), these rankings maintain the top 10 cities almost unchanged, confirming their leadership as the most chosen destinations by startup founders.
Regarding Italy, the first choice for startups in the ranking is Milan, positioned fifteenth, followed by Rome in twenty-fifth and Bari in thirty-ninth place. However, Milan leads the ranking for the highest number of co-working spaces per population, with 1.1 stations per 10,000 inhabitants, the highest number of university founders per population (10 per 10,000 inhabitants), and the record as the location of the second offices of European unicorns.
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