Beyond 2020, what market opportunities are there for Singapore startups and SMEs in Germany? While COVID-19 has impacted startup ecosystems worldwide, Germany’s startup scene has shown remarkable resilience in the face of uncertainty, with new startup initiatives and German startups continuing to close multi-million dollar funding rounds. If you’re considering Germany as the next potential designation for your company’s market expansion strategy, here’s an infographic snapshot of what you can expect there, and why now may be the right time to start exploring business opportunities and validate your market potential in Germany.
The days of copycat startup ventures are long gone; Germany’s startup ecosystem has matured, with deep-tech and manufacturing-led solutions coming to the forefront. The creation of 12 digital hubs across the country provides plentiful opportunities for startups in diverse industries from FinTech to Smart Infrastructure to get connected with all relevant stakeholders in their respective area.
It’s a good time to start a business in Germany, with startup founders raising a record €6.2 billion in 2019, 36 percent more than in the previous year. This year, Germany also ranks as the best European country for startups for the second year running, based on a study conducted by UK-based firm NimbleFins. Major draws for entrepreneurs include a healthy economy, favourable business climate and relatively low corporate tax rate.
The current pandemic has reinforced the ties between startups, corporates and government in Germany. Apart from providing emergency state aid to startups, German federal and state government agencies have a longer-term plan of enhancing the competitiveness and market access for overseas startups of its tech sector, increased funding for startups to drive the digitisation of traditional industries, and continuing to actively supporting international startups to land in Germany. German corporates are also actively seeking collaboration with startups offering innovative solutions addressing challenges arising from COVID-19, demonstrated through the Startups Against Corona initiative.
In terms of industry trends, the following sectors are booming and will provide good growth opportunities for Singapore startups and SMEs:
- Healthcare: Germany is Europe’s largest healthcare market and starting from 2020, has the distinction of being the world’s first country where doctors can prescribe medical apps to be reimbursed by statutory health insurance
- Logistics: With Germany being Europe’s #1 logistics hub, COVID-19 has pushed companies to optimise their supply chains, offering strong growth areas for startups
- Industry 4.0: Germany is the world’s leading Industry 4.0 nation, with 83% of German companies being keen to further digitise their value chains in 2020, especially focusing on remote monitoring solutions
- Robotics: Germany currently ranks #3 worldwide in terms of the density of industrial robots deployed, after Singapore and South Korea. While total sales in robotics and automation are expected to drop due to COVID-19, growth prospects continue to look positive beyond 2020, according to the VDMA (German Engineering Federation)
- FinTech and InsurTech: Germany is a key FinTech hub in Europe and beyond. More than 900 FinTech and InsurTech companies are active in Germany, with the sector being the 2nd most well-funded in 2019 (€1.3 billion) and projected to rise further
At Scaler8, we seek to provide Singapore companies with the best toolkit, resources, and aid with identifying market opportunities to venture into the German market and thrive. If you are keen to find out more about how we can support your expansion plans, do get in touch to schedule a 1-on-1 market advisory session for your company.
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