Berlin’s bid for London’s tech talent

Rory Cellan-Jones
Technology correspondent
@BBCRoryCJon Twitter

media captionRory Cellan-Jones reports: "Suddenly technology incubators like The Factory are springing up [in Berlin], housing all sorts of ambitious new tech firms"

London and Berlin - two great European cities with much to offer technology companies.

But now the German capital sees a chance to steal a march on its rival and perhaps take over as Europe's leading technology cluster.

Soon after the Brexit vote, letters began arriving from Germany at a number of small London technology companies.

One of them was addressed to Maz Nadjm, founder of SoAmpli - a social media advertising agency based just off the Silicon Roundabout on the fringes of the City.

The letter came from the office of Berlin's senator for technology and industry.

Mr Nadjm was impressed. "They got my name right - and they're inviting me to Berlin," he says.

image captionMaz Nadjm was one of the London-based entrepreneurs targeted

The letter explained that after the UK's vote to leave the EU, a company like his would receive a warm welcome if it chose to secure its access to the single market by moving to Germany's capital.

As well as the letters, a bus promoting Berlin was sent through the streets of Shoreditch.

image copyrightGetty Images
image captionCornelia Yzer is behind the campaign to poach London young tech firms

In her office, filled with models of the city mascot, the Berlin bear, I put it to senator Cornelia Yzer that her whole campaign was a bit cheeky.

"There's nothing wrong with competition," she tells me.

"We are a vibrant city, we attract talents from all over the world.

"And maybe it's also the right location for a London-based company to open an office here to make sure they're part of the EU in future."

On the face of it, Berlin's ambitions look far-fetched.

London has far more technology jobs right now - 328,000 to the 80,000 in Berlin - and is the first place many American tech companies think of when looking for a European base.

image copyrightAP
image captionAn advert trying to woo start-ups to Berlin toured east London in July

But Berlin has long been a magnet for creative young people.

When I lived and worked there for six months on a youth exchange programme in the late 1970s, at the height of the Cold War, students from West Germany flocked to the city because they were allowed to avoid military service there.

It had a great music and art scene, although in those uncertain times was not a great place to start a business.

But a quarter of a century after the fall of the Berlin Wall, this city's economy is finally accelerating after a sluggish start.

At Factory Berlin, a tech incubator in a restored warehouse right next to the memorial to the wall, we found lots of eager young start-ups, alongside established companies such as Soundcloud and Twitter.

As we wandered past a ping-pong table towards the coffee station, in an environment familiar from Shoreditch to Silicon Valley, the marketing manager, Lukas Kampfmann, pointed out some tenants.

They ranged from a one-man company starting a dating app to Deutsche Bank, which has set up an innovation unit here.

image copyrightAP
image captionLukas Kampfmann suggests start-ups in Berlin have smaller bills to pay

Mr Kampfmann has a great sales pitch, reeling off all sorts of facts and figures to prove Berlin is the place to be - rents are about half the level of London, there is great infrastructure and talent, even the amount of venture capital invested here last year outstripped what went to its British rival.

"We're at a very interesting sweet spot," he tells me.

"If you raise €100,000 [$111,810; £86,262] it goes a lot further. This is not hype this is sustainable into the future."

And outside we ran into one of his tenants, Anna Bojic. Her gifting site, Merisier, is expanding rapidly and she believes that Berlin now provides a great environment for start-ups.

"It has been reinventing itself since the 1990s," she says.

"It draws very creative people who are different, who are risk takers, people who want to try things differently."

And she is confident that it can prosper at London's expense after the EU vote.

"I do think it will change the way investors will behave," she says.

"Now Berlin is positioned in a very open larger market. I think money will come that hasn't been here before, and talent will be drawn here."

image captionStart-ups based in Berlin include the food-ordering service Delivery Hero and the audio platform Soundcloud

But back in London Mr Nadjm is not packing his bags and heading to Germany.

"I love Berlin, it's very cool, but for what we do at my start-up it's not the right place," he says.

"The UK is a lot more mature when it comes to digital and social media. And besides that it's home here, Brexit or not, and we're staying."

Berlin is a vibrant, exciting and youthful city these days. But London has a couple of great advantages - the English language and one of the world's great financial centres.

Do not expect it to give up its title as Europe's tech capital without a fight.

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