Historic publishers such as Axel Springer, Gerd Bucerius, John Jahr and Richard Gruner are at the heart of Hamburg’s prominent image as a “media city”. Despite recent shifts by large publishers such as Axel Springer SE towards Berlin (Manager Magazin 2003), many major press outlets are still based in Hamburg. Newspaper and magazine publishers such as DER SPIEGEL, DIE ZEIT, Gruner + Jahr, Bauer Media Group, Funke Mediengruppe, Hubert Burda Media, Jahreszeiten Verlag, Mediengruppe Klamt and many others are at the core of Hamburg’s press industry.
Among the 12 largest German media corporations (four of which are TV outlets (ARD, ZDF, RTL Group and ProSiebenSat.1 Media) and one is Bertelsmann, owning both RTL Group and Gruner + Jahr), 2 have their headquarter in Hamburg and all of them operate major offices in Hamburg (see table 12).
Since the technology-driven creative industry evidently is a major facilitator of Hamburg’s economic development, many of the Hamburg based startups focus on business models close to the media and digital industry as is evident by taking a closer look at the venture capital investments and startup activities in Hamburg.
3.2 Venture Capital Activity in Hamburg
With around EUR 300 million of venture capital investments in 2015, Hamburg is the 5th strongest VC location in Europe and 2nd in Germany (Ernst & Young 2016). Interestingly, the average deal size in Hamburg is EUR 10.57 million and about the same as in Berlin with EUR 10.46 million, while Munich has a much smaller average deal size of EUR 3.89 million (see table 13).
This could indicate that Hamburg is about as prospering in terms of VC funding as Berlin, just at another level of deal volume. In fact, the growth of Germany’s entrepreneurial ecosystems outpaced other European regions in terms of VC investments for years and is driven particularly by Berlin, Hamburg and Munich (Ernst & Young 2015).
Among the top 5 startups in terms of funding in Germany, 2 are based in Hamburg. Gaming company Bigpoint, founded in 2002, received a total funding of USD 461 million and FinTech company Kreditech, founded in 2012, received total funding of USD 355 million as of September 2015 (see table 14).
Most of these investments are growth or later stage investments, usually done by investors from the UK, the U.S. and Asia. The largest investors according to Ernst & Young (2015) data are Kite Ventures, Phenomen Ventures, DN Capital, Insight Venture Partners, Blumberg Capital, Kreos Capital and Luxor Capital. Financing instruments used are both equity and venture dept. German later stage investments were done through venture capital firms such as Earlybird, Lakestar, Holtzbrinck Ventures and Rocket Internet among others. Prominent investment banks such as Goldman Sachs are also active in Germany. All of these international investment activities indicate the growing attractiveness of Germany’s entrepreneurial ecosystems (Ernst & Young 2015).
Looking at investments done in Hamburg specifically over the last years, the number of investors active regionally still is much smaller than in Berlin. Ernst & Young (2015) lists 36 key investors in Hamburg opposed to 110 in Berlin. This number might not be that indicative though, since it is unclear wether this data really indicates venture capital investment activity in Hamburg or is only linked to investors being stationed in Hamburg. The actual number of active investors might be very different and probably much higher since both national and international investors who invest in Hamburg based startups are not included in the list.
In any case, the data shows that Hamburg’s entrepreneurial ecosystem is both thriving and attractive to both national and international investors, underlined by the biggest European VC funding in Q2 2016 - a USD 46 million series C round investment in Hamburg based startup Finanzcheck (KPMG & CB Insights 2016).
Among so called “unicorn” startups, companies with a valuation of over USD 1 billion, one is from Hamburg, four are from Berlin according to Ernst & Young (2015) data for 2015. Among four additional startups on their way to achieve this valuation, one company is from Hamburg while all others are from Berlin (see table 15). Rocket Internet could be excluded from this list since it actually is an incubator - investing in various startups and therefore not necessarily qualifying as an high-growth startup itself - making XING one of four “unicorn” startups in all of Germany.
Clearly, Berlin is the number one entrepreneurial ecosystem in Germany, proven not only by media attention but startup rate (Metzger 2015), active investors, company valuations (Ernst & Young 2015) and investment volume (Ernst & Young 2016). At the same time, Hamburg arguably is second with no other location in Germany catching up.
3.3 Startup Activities in Hamburg
The privately operated initiative Hamburg Startups developed the “Hamburg Startup Monitor”, closely reporting on startup activities within the Hamburg metropolitan area. Unfortunately only “live” data is available on the website, so no insights into recent changes or historic developments within the entrepreneurial ecosystem can be obtained.
This is due to the fact that the “Hamburg Startup Monitor” has only gathered data for a short period of time, starting in 2015 (Jensen 2016). Still the data points gathered provide a convenient way to dive into Hamburg’s entrepreneurial ecosystem and its startups.
Figure 9: Category of startups monitored by Hamburg Startup Monitor
With more than 430 businesses on report in April 2016, the ecosystem is growing continuously with the most prominent startup categories being Commerce, Services and Media (nextMedia.Hamburg 2016b). In November 2016, more than 580 startups (see fig. 9) are on record on the website (Hamburg Startups 2016).
Lines between the startup categories might be blurry, since a fashion startup might also qualify as commerce startup and a FinTech startup might also qualify as a service startup. Especially with categories such as tech it might be very difficult to indicate a correct representation of the startup.
In addition, since it is self reported data from startups, the categorisation might be incorrect or could change if the startup’s perception of itself changes over time. Still the data provides some indication of what industries the startups within Hamburg’s entrepreneurial ecosystem are related to.
In terms of the individual business models pursued by Hamburg based startups the Hamburg Startup Monitor provides some insights as well. The most dominant business models for regional startups are subscriptions (freemium, subscription, SaaS), direct sales, commerce, commissions and advertising (see fig. 10).
Figure 10: Business model pursued by startups monitored by
Hamburg Startup Monitor
In regards to being closely related to media industry business models, the categories subscriptions, commissions and advertising seem highly attractive to established media industry value chains.
As illustrated before, startups may evolve very dynamically. They can rise and perish in the period of just very few months or even weeks. Therefore information about the age of local startups might provide a way to indicate both health of the entrepreneurial ecosystem in general and longevity of business ideas pursued by startups within in.
Based on the data available, 165 startups have been funded in 2015, 146 in 2014 and 75 in 2013 (see