Two of Europe’s major tech hubs have announced a startup deal that will bring their thriving ecosystems even closer together. The cities of Tel Aviv and Berlin signed an agreement through which coworking spaces will be exchanged, and Israeli entrepreneurs given the chance to work in the German capital for free.
Starting with an event at the Tel Aviv branch of WeWork, the $5 billion-valued coworking network, the agreement will allow five pairs of Israeli entrepreneurs to enter a competition to win free flights and accommodation in Berlin, and desks at one of its coworking spaces, for ten days.
The agreement, a collaboration between Berlin Partner and Tel Aviv Global, is the latest in a line of attempts at bringing two of the world’s most vibrant startup ecosystems closer. “Tel Aviv and Berlin are both cities known for their startup friendly surroundings and infrastructure and we are sure that both cities can benefit from a startup cooperation,” Andrea Joras, managing director of Berlin Partner, told Red Herring. “The core of the collaboration between Berlin Partner and Tel Aviv Global is the exchange of co-working seats at public or private co-working hubs and landing support for internationalizing startups.”
“This is a really exciting time for both German and Israeli entrepreneurs and startups,” said Hila Oren, CEO and founder of Tel Aviv Global. “Tel Aviv is the startup city of the startup nation, and we see a huge amount of foreign companies looking to be part of the amazingly innovative culture we have here. We’re thrilled to sign this agreement with our partners in Berlin and are looking forward to welcoming German entrepreneurs to our nonstop city”.
Tel Aviv has risen in recent years to become one of the world’s premier startup spots. It is home to over 700 early-stage firms, and an estimated 5,000 overall, with 2014 making it an ‘exit nation’, according to many experts, its tech sales and IPOs having hit $15 billion. That figure is expected to be matched this term. This year Israel contributed 19 of Red Herring’s Top 100 Europe winners, and is home to market-leading firms such as quick-charging phone battery Storedot and booking app Roomer.
Berlin, meanwhile, has lived with its startup hub label almost as long, it seems, as its ‘Poor But Sexy’ moniker, coined by former mayor Klaus Wowereit. Fueled by low rents and few bureaucratic hurdles, the city has become one of, if not the, premier European startup destination.
100,000 new jobs are expected to be created in the digital industry by 2020 and, while its investment figures are still wildly below Silicon Valley, this year Berlin has begun to attract some heavyweight M&A activity. May’s $589 million Yemeksepeti acquisition, by Delivery Hero, was seen as a benchmark in the way Berliner companies may begin to take hold of the market, rather than be led by it.
This weekend’s deal will be far from the first collaboration between Germany and Israel’s startup communities. In July the German government pledged €500,000 ($567,000) to Israeli entrepreneurs under the EXIST program, designed to ease recent graduates from both countries into the workforce. Trade between Israel and Germany currently stands at around €6.5 billion ($7.4 billion) despite post-war diplomatic relations having been initiated only in 1965.
Startups from Berlin can benefit from the exchange program because they get the opportunity to get in contact with high-innovative companies and investors from Tel Aviv,” added Joras. “Startups from Tel Aviv can start their international strategy entering the European market from out of Berlin and get in touch with German industry.”
Culturally speaking, says Boaz Rossano, co-founder of Tel Aviv firm VideoDubber, the two cities are closely related: “In both cities great technology is appreciated, good technological ideas are appreciated, and disrupting strategies are valued.
“The main difference is that in Israel there are a lot of private investments done by angels and VCs, while Germany doesn’t have such a crowded investment scene,” adds Rossano. “The other difference is that Israelis are used to improvise everything and are used to break the template in anything they touch, and hate standing in lines, which makes them great entrepreneurs, as they aren’t scared of a century old tradition, and if they find an innovative idea of how to improve it, they can do it quickly and without hesitation.”
Some quarters of Berlin have taken on a quiet yet intriguing Israeli bent in recent years, as young people from the latter have been attracted by the German capital’s low cost of living, thriving creative scene and favorable visa agreements. This correspondent lives very close to an Israeli vegan chocolate/ambient techno vinyl store, which may just be the most Berlin thing ever.