Ever since the UK voted to leave the EU, many have wondered what it means for London’s startup scene. Some have predicted it could mean Berlin becomes the preferred destination for startups looking to put down roots.
There are certain things entrepreneurs look for in a city to call home. These range from a large talent pool and easy access to financing, to passion for innovation and a unique way of life.
London and Berlin both vie for the title of Europe’s #1 hub for digital startups. But which pips the other to the post? The fight for the most attractive startup location is on!
Starting a startup
If you want to start a business in London it will take you less than five days and a £15 online registration fee. In Berlin, the process will take seven days and cost you £550. Compared to other European cities, this is fast and cheap in both cities.
According to figures from funding database PitchBook, London’s tech companies attracted £1.8 billion in venture capital funding last year. That’s 72% of the total £2.5 billion raised. By comparison, Berlin attracted £937 million of investment in 2018 (almost double the previous year’s total).
In terms of corporate income tax, startups are looking at 25% in London, while in Berlin that figure sits between 30% and 33%.
Both cities hire talent from a range of backgrounds. London is dubbed the most diverseecosystem in Europe, while Berlin has been named the most gender equal startup hub in Europe. Both admirable claims to fame.
The figures used to back up those claims include London’s 53% foreign employees and 50% foreign customers, and Berlin’s 27% female employees.
Looking at the all-important living cost, London’s overall living costs are 43% more expensive than in Berlin. Meanwhile, Berlin’s housing rental prices are 70% lower than in London. It’s the same picture with transport costs, the price of food and drink, and internet subscriptions – all are higher in London compared to Berlin.
You’d think the salaries made up for that. However, a quick Glassdoor search reveals that software engineers earn an average of £41,000 in London and £44,000 in Berlin.
And the winner is… Berlin!
Both cities are renowned for nurturing creative people and lifestyles. With vibrant creative scenes, cultural activities and nightlife, employees will never be at a loss for things to do.
Both cities have seen an explosion in the number of digital companies setting up shop in recent years – and that growth is expected to continue in coming years.
While London may have the edge in terms of starting a business – it’s cheaper and faster, and it attracts more venture capital investment – Berlin’s lower cost of living makes it the smart choice for entrepreneurs looking to put down roots.
If you’re looking for a new challenge in a new city, get in touch with our team. With tech roles at a range of startups, who knows where your career will take you?