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London v. Berlin: Which is better for startups?

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London v. Berlin: Which is better for startups?
Photos: London skyline from Pexels.com, Berlin skyline by Thomas Wolf/Wikimedia Commons.
11:05 CEST+02:00
Graphic design marketplace 99designs shares with The Local how London and Berlin compare when it comes to launching and working for a startup. Which one would you choose?

After UK voters opted to leave the EU in a referendum in June, many experts started pondering what Brexit would mean for London’s startup scene. Some went so far as to predict that it would lead Berlin to become Europe’s new startup capital after London topped the charts as the best place for startups in the 2015 European Digital City Index.

Online graphic design marketplace 99designs decided to look at the cities side by side and challenge readers to decide: which one will end up on top for startups in 2016?

Starting a startup

According to 99design’s research, it seems like it’s slightly easier to launch your own new tech firm in London: a company there can be created in less than five days and registered online for £15 (€18). That’s compared to less than seven days in Berlin at £550 (€650).

Maybe that’s part of why there are about 275,000 startups in London compared to 171,000 in Berlin.

But Berlin does have £1 billion in venture capital funding, while London has £860 million.

Still, London’s so-called ecosystem value - the estimated value of the startup scene - is £38 billion and Berlin’s is only £23.7 billion. And corporate income tax in London is 25 percent, whereas in Berlin it’s 33 percent.

The people

Image: 99designs.

Both cities seem to hire people from a variety of backgrounds: London is dubbed the most diverse ecosystem in Europe while Berlin is called the most gender equal startup hub.

In Berlin, 27 percent of employees are women while that proportion is 24 percent in London. But there are certainly more foreign workers in London: 53 percent versus 49 percent in Berlin.

Even the startups customers are a bit more international in London: 50 percent are foreign there and 47 percent are foreign in Berlin.

About one in three startup workers in London work remotely compared to about one in four in Berlin.

Living and working

Image: 99designs.

Software engineers in London make slightly more, at £49,000 versus £47,000 in Berlin.

But the British capital also tends to be more on the expensive side: rental prices in Berlin are 70 percent lower and the overall cost of living in London is 43 percent higher than in the German capital.

The average Berlin techie living in the city centre would spend about £530 per month (€627) for a one bedroom flat, while Londoners dole out on average £1,679 (€1,986) for an equally central location.

Meanwhile, the morning staple many techies grab on the way to work - a cappuccino - costs on average £2.61 in London and £1.87 in Berlin, which is a 40 percent difference.

And if you’re going for a nice lunch break with co-workers in London, be prepared to drop £15 in a London cafe compared to £6.28 in Berlin.

Perhaps most importantly, beer in Berlin is much cheaper. That after-work pint will cost you about £4 in London versus £2.35 in Berlin.

So which city will ultimately come out on top for this year? 99designs urges you to make your bets now.

99designs is the world’s largest on-demand design marketplace, connecting a global community of freelance designers with businesses of all sizes to complete their design needs. To see the full infographic and research by 99designs, check it out here, and learn more on their website 99designs.co.uk.

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