German startups: The hype is over, 2014 is business time


Amen, Gidsy and Moped – three startups that, in the past, represented the hype surrounding the German startup scene. All three gave up in 2013, with what was left of their product, staff or code going to, GetYourGuide, and 6Wunderkinder respectively.

One thing is for sure – 2013 proved that the startup boom is continuing, but the hype is over. That’s not to say that these hyped startups didn’t have their positives, they drew attention to Berlin and, with that, attracted investors too. But 2013 was not a glamorous year for startups.

The model startups of 2013 are hidden champions like online marketing company Sociomantic, which is now generating $100m in revenue after three years of working under the radar. The product might not seem particularly exciting to outsiders, but it is good and from the get go the founders decided how they could make money with it.  And that’s why they are now successful.

Startups like Sociomantic stand for a solid middle class that has emerged out of the shadow of the Amens, Gidsys and Mopeds. The trends are now big data, payment solutions and B2B services. ECommerce startups that put a lot of money into exciting marketing and top-notch PR campaigns are on the out. In are sophisticated high-end products: data analysis, SaaS and even hardware. Lock8, the intelligent bike lock that won the top prize at TechCrunch Disrupt, for example. Or Tado, the smart heating app from Munich.

The next trend: Big data. It’s not exactly sexy, but it is promising. The major startups in Germany managed to pull significant funding in 2013 – Datameer, $19m, Parstream, $8m, RapidMiner, $5m and Trufa, $4.5m.

Another high-growth area? Payments. Card payment services SumUp, Payleven and iZettle are competing fiercely against one another and expanding rapidly. Backend serviced like Payworks profit from this, while startups like Avuba, Papayer and Weltsparen provide the backbone in the consumer area. And, proving that lending platforms are a growth market, even notorious Berlin company builder Rocket Internet launched its own provider – Lendico.

But to come back to celebrated startups, there are also some that have managed to rise above the hype. After Berlin startup 6Wunderkinder faced a massive setback with the failure of Wunderkit, it retreated from the limelight, worked quietly on its second product – Wunderlist – and made a comeback. The team’s reward? A $19m funding round from acclaimed investors including Sequoia.

This is what 2014 will look like

6Wunderkinder will have to prove that it can actually make money with its to-do app Wunderlist. The anti-hype trend will continue. ECommerce won’t experience a revival, deal platforms and subscription box services will have a tough time, as they did in 2013.

That means: The startup landscape will continue to consolidate. The best prepared for this are the SMEs, the “boring” B2B companies that managed to develop a business model out of their ideas early enough – and are now on the road to success.

Image credit: Flickr user Shawn Whisenant

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