Israelis starting out in Berlin
An increasing number of Israeli start-ups are seeking to conquer the market from the German capital.
When Elad Leshem gets hungry, he folds his notebook shut and walks the few metres over to the canteen at Technische Universität (TU) Berlin. There he takes a tray and then his place in the queue. He is not a student, but likes to make use of the benefits of a university canteen, it is practical after all. Elad Leshem is an entrepreneur; in mid-2014 he and Itamar Maltz established the start-up qDatum.io, a kind of eBay for data.
Their project gets support from the university incubator, the Centre for Entrepreneurship. The TU is furnishing Leshem and Maltz with an office for a year, helping them make contacts and offering workshops in which they learn, for instance, how best to present their idea. This can be a great help, above all when seeking to convince German investors. Leshem and Maltz are part of a growing number of young Israelis looking to get a foothold in Germany; indeed, the number of start-ups in Berlin with founders speak Hebrew is growing. Talking Layers is one such start-up, a marketing company for online advertising, as is Upcload, a tool that helps customers order the correct clothing size when shopping online.
Hemdat Sagi, Director of the Israel Trade Center in Berlin, says she can hardly manage to keep an eye on all the Israeli companies popping up. A number of parallel developments have pushed Berlin into the focus of Israeli entrepreneurs, she notes. Firstly, the German capital has suddenly become an attractive destination for Israeli tourists, and ever more airlines are offering flights to the city. Moreover, Germany in general and in particular Berlin has become more open to innovations, says Sagi. And of course she also cites the low cost of living compared to Tel Aviv, the start-up stronghold. Put simply: “In the last three years Berlin has let the world know that the city is a place to be.”
According to the Senate Administration for the Economy, around 62,400 people work in the digital sector in Berlin, which comprises no less than 5,800 different companies. And it is growing: One study by Investitionsbank Berlin discovered that a new technology-based start-up is established in the city every 20 hours.
The influx is also being stimulated by so-called accelerators, which support start-ups in the critical early phase. “Plug and Play” by Axel-Springer-Verlag is one such accelerator. Several times a year, the initiators invite start-ups from all over the world to Berlin for three months. The office housing the guests is located in the Kreuzberg district, and the package includes start-up financing. Five of the eight start-ups “Plug and Play” supported in the last round came from Israel; an impressive quota. Hemdat Sagi agrees, saying: “That was a great presentation of Israeli expertise in the high-tech sector.” Major companies have known this for a while, and Deutsche Telekom and Bosch, for example, target programmers from Israel in their recruitment measures.
It is of course also the soft location factors that make Berlin interesting; after all, the city is famous for them, namely the parties that never end, and the art. In any case it is for these that theatre director Michael Ronen came to Berlin from Tel Aviv a few years ago. He started at the alternative theatre Ballhaus Naunynstrasse in the trendy Neukölln district and soon after moved to the renowned Gorki Theater. And although he is an entrepreneur, his office is still in the classicist 18th-century theatre building. Two years ago he and fellow theatre director Daniel Paz founded capsuling.me, a location-specific service that can be used to link digital content with places, videos, images or audio files. “Only those people who are at a particular place at a particular time get the content,” explains Ronen. They may be visitors to a theatre performance or a football game, for example. If you like, it is a treasure hunt 2.0.
Michael Ronen sees Berlin through the eyes of a creative professional; he is not primarily concerned with the number of investors or amount of venture capital circulating. The most important thing is the “creative core”, he notes. Berlin has absolutely no need to constantly look towards Silicon Valley, he says. The city should just be itself: a magnet for people from all over the world, an inspiring place of innovation.
Israel and Germany are a perfect team, according to Mickey Steiner from the Berlin-Tel Aviv Technology and Entrepreneurship Committee, or BETATEC for short. Both cities are young and innovative, whereas Germany with its base of SMEs is more traditionally structured and can benefit from the ideas of the start-ups. Moreover, he adds, both Germans and Israelis tend to get to the point without beating around the bush.
The founders of qDatum.io can only agree: “The good thing is”, says Itamar Maltz, “that Germans clearly say if they don’t like or understand something.” That makes work much easier. Maltz has been in Berlin since the beginning of 2014, having previously lived on a kibbutz in northern Israel. Co-founder Elad Leshem arrived three years ago from Tel Aviv to do his MBA at the European School of Management and Technology. Now they share an office at TU Berlin. The room itself is small: a window, a radiator, a desk. There are empty water bottles lying around, a few document files, and there is an empty pin-board hanging on the right-hand wall. The cables belonging to the large computer monitor are still exposed. In this early phase the pair needs nothing other than their notebooks. If all goes well, that may very well soon change.
