Munich Tech Map
Research Emma Tracey
While Berlin is the capital of Germany, Munich is its economic heartland. The Bavarian capital has the highest purchasing power of any German city and many of large German companies are headquartered here, including global corporations such as Allianz, BMW, MAN, Munich Re, and Siemens.
But what does Munich have to offer software developers?
To figure that out, we created the Munich Tech Map, a guide to jobs and companies in the city for software developers. We mapped 200 tech companies (both startups and corporates) based in Munich, classified them by industry and further divided them by their programming languages. We also talked to some locals in Munich’s developer scene and soon discovered the city has a lot to offer software developers.
Munich’s Economic Dominance
According to Deutsche Startup Monitor, 31% of startups in Germany are located in Berlin, compared to 11% in Munich. If you take Bavaria, the state to which Munich is the capital, as a whole, that number jumps to 16%.
While Berlin is home to the most startups in Germany, Munich’s strength is its mix of old and new industry. The reasons for Munich’s economic strength are both cultural and historical: following WW2, many firms moved production from East to West Germany. After the fall of the Berlin Wall, East Germany again underwent a sustained period of deindustrialization; large rundown East German industries were sold off to West German companies by the German Treuhand agency, created in 1990 to privatize state-owned East German assets.
While Bavaria flourished, Berlin floundered. And despite over €2 trillion of financial transfers from the former West to the former East, huge disparities still exist between the regions, in measures such as labor productivity, GDP, and income. Maps comparing the regions confirm this fact.
For software developers interested in working in Munich, Bavaria’s dominant economic position has a number of implications. First, wages are higher here than in Berlin, but so is the cost of living. Second, there is a broader choice in types of companies and industries to work for, but fewer startups. To give a rough analogy, Munich is to Berlin what New York is to Silicon Valley.
Despite fewer startups, Bavarian automotive, finance, and media giants based in Munich are eager to cement Germany’s reputation not just as a traditional engineering powerhouse, but also as a world leader in software engineering, which makes Munich a rather exciting place for software developers to be.
Mobility in Munich
Every fourth German car is made in Bavaria. Munich is home to BMW and various other suppliers. Audi is based 50 minutes away in nearby Ingolstadt. Close to 200,000 people in Munich are employed in the automotive industry, which generated €110 billion in revenue in 2014. The shift to autonomous driving is a big topic in the city, and one which dominates strategy of major carmakers.
At a December meeting of BMW, Munich’s most famous carmaker, the company’s CEO Harald Krüger, admitted that Apple, Google, Uber and Lyft were “very dangerous players” in the car market. Krüger was talking days after BMW had posted its best-ever earnings, which largely came from record sales in its BMW, Mini and Rolls-Royce brands. Despite its bumper profits, BMWs shares were down by a fifth, reflecting concerns of shareholders about the encroaching influence of tech companies.
In the same meeting, Krüger added that Germany’s background in engineering and automation made it the ideal location to respond to trends, “We in Germany have the best conditions for a new era of mobility,” he said, adding that the car industry was not being transformed, but was simply “on the move”.
BMW is currently extending its reach into tech and startups. DriveNow, the pay-by-the-minute car-sharing service launched in 2011 is owned by BMW, and now operates in 11 European cities. The US version, ReachNow, which launched in three pilot cities in 2016 and has 32,000 members. The company also has a VC arm, iVentures, which operates a $530 million fund, investing in shared mobility, virtual reality, in-vehicle digitalization, and cloud technologies.
BMW Startup Garage is BMW’s Venture Client and is also based in Munich. It is focused on automotive technology and urban mobility. For startups in the program, BMW buys a first unit of the startup’s technology, provides office space and supports in manufacturing of a prototype, as well as access to skills through BMW’s innovation centres.
Daimler is also investing in startups in Munich. Daimler Mobility invested in FlixBus, a long distance bus company with an online booking platform, which since the end of the railroad monopoly and the privatization of the intercity bus market in Germany, has been offering bus tickets at very low prices.
Sixt, a car rental company with about 4,000 locations in over 105 countries, is also encouraging entrepreneurship within the company. According to Boyan Dimitrov, Director of Platform Engineering at Sixt, one of the biggest technical challenges has been the shift to a new mindset about building cloud-native software: “Running applications in a cloud environment is something new for us, because we are used to operating our own data centers and therefore we are used to managing our applications in a certain way. Now when we are building applications on the cloud we have to think more about how they behave in an environment which we do not fully control. Its been a steep learning curve to figure out how to build automated and resilient software that relies on self-healing.”
That thing, that thing, that Internet of Things
Munich’s combination of high-tech industries, knowledge-intensive services and traditional production make the city a fertile breeding ground for emerging Internet of Things companies. While the phrase IoT irks many developers for its overly generalized and somewhat inexplicable applications, the term is useful as a catch-all phrase to describe the connection of everyday objects to the internet, allowing them to send and receive data.
In December 2015, IBM opened its Watson IoT Global Headquarters in Munich where a team of 1000 developers, consultants, researchers and designers are working on cognitive computing. This is IBM’s largest investment in Europe in more than two decades. “The Internet of Things will soon be the largest single source of data on the planet, yet almost 90 percent of that data is never acted upon,” said Harriet Green, general manager, Watson IoT and Education. “With its unique abilities to sense, reason and learn, Watson opens the door for enterprises, governments and individuals to finally harness this real-time data, compare it with historical data sets and deep reservoirs of accumulated knowledge, and then find unexpected correlations that generate new insights to benefit business and society alike.”
According to IBM, there are more than 9 billion connected devices operating in the world today, generating 2.5 quintillion bytes of new data daily. Making sense of data embedded in intelligent devices is creating a significant market opportunity that is expected to reach $1.7 trillion by 2020. A number of startups in Munich are attempting to capture this market.
ProGlove developed the first smart glove used for industrial purposes. Jonas Girardet, CTO and one of the company’s founders, described the growing interest of corporates in Munich’s startups, “I think the last years there has been a shift in thinking on high management levels about how to speed up the innovation process. Now large companies really want to work with startups, especially here in Munich where there is a technology hub provided by the network of startups, universities and corporates” He continued that innovation is key to maintaining Germany’s position as a driver for manufacturing processes. ProGlove received support from corporate clients in developing prototypes and use cases for their product.
Similarly Konux are developing smart sensor systems helping industrial companies to reduce maintenance costs with artificial intelligence. Kinexon’s technology is being used to improve manufacturing and logistics processes and products in navigation of driverless transport systems, asset tracking, process mapping and worker safety management.
Another IoT company to emerge from Munich is Bragi. The company launched in 2014, following a successful $3.3 million Kickstarter crowdfunding campaign. A year later, it launched Dash, the first completely wireless smart headphones, which can be used to listen to music, track your heart rate and oxygen saturation,, among other features. Dash is a powerful microcomputer with more than 150 micro components, 27 sensors and a 32-bit processor. Bragi switched from Bluetooth to a technology called Near-Field Magnetic Induction, or NFMI, which uses a low-power magnetic field to transmit data.
For startups operating in IoT in Munich, the efficient supply chains are a huge benefit. CTO of Bragi, Toby Martin, commented, “The list of requirements to make the Dash is enormous; it was far far more complicated than we anticipated when we started. But when we were struggling with electronics, with the materials, the optics and the components, we always found that somewhere near Munich there was a company doing precisely what we needed and there were happy to help us. And certainly in the wider community of Munich companies there was a sense for community.”
The dominant programming languages these IoT companies in Munich are hiring for are C++, Node.js and Python.
Virtual Reality Munich
Metaio are the pioneers of Augmented Reality (AR) in Munich. Their purchase by Apple in 2015 catapulted Munich to the forefront of AR worldwide. While exact figures on the number of companies operating in AR and Virtual Reality (VR) in Munich are scarce, there is a vibrant community and some strong emerging players.
Like IoT, the development of AR and VR in Munich is tied to a mix of excellent universities, strong corporate support and dynamic community initiatives.
The city is home to Technische Universität München, where world-class research is being conducted under the guidance of Professor Klinker. Likewise, the Bayerisches Filmzentrum offer coaching and support for content creators on the 360°/VR track of the First Movie Program, as well as workshops, labs, masterclasses and events. Automotive companies, such as BMW, and media companies, like Pro7 and Sky are working on AR and VR applications. Last year, Audi launched its VR experience in selected dealerships, to give customers an idea for the look and feel of their potential new purchase.
According to Dirk Schart, co-organizer of the VR and Mixed Reality Meetups, companies like Google are also supporting the local scene by sponsoring meetups. This confluence of community, corporate support and technical skills have given rise to a number of AR/VR companies in Munich. RE’FLEKT, for example, was founded in 2012, and creates AR and VR technologies, such as face tracking, which they are developing for the augmented windows of Elon Musk’s Hyperloop. Other startups and agenices include Innoactive, Dexperio, and CoSpaces.
Media and Finance in Munich
Munich is also a prominent media hub and the center of southern German finance. While TV and production dominates in Cologne, publishing rules in Berlin and Hamburg, and advertising leads in Düsseldorf and Frankfurt, Munich’s media sector is known for its diversity.
According to Munich’s Department of Labour and Economic Development, there are 8,100 companies in media in Munich, with close to 30,000 employees. The city is home to ProSiebenSat.1 Media AG, one of Germany’s biggest media groups, and Burda Media, a publishing company which owns over 400 magazines, including German editions of of Playboy, Elle, and Harper’s Bazaar, and Burda Style. Both companies are actively involved in startups.
The influence of media in the city can be seen in the MarTech and AdTech startups which populate the startup ecosystem.
Many large financial institutions, including banks, insurance companies and other providers of financial services are located in Munich. Allianz and Munich Re, two large insurance companies, are headquarted in Munich.
Finanzchef24, an online broker and comparison portal, is one of the city’s biggest succeses - it has raised over $17 million in three rounds since founding in 2012, positioning it as one of Munich’s best financed startups.
Other succesful FinTech ventures include online fundraising platform, Altruja, mobile payments provider, Boku, online payments provider Paymill and online bank Fidor Bank. The majority of FinTech startups use PHP, Java and Ruby in their tech stacks.
For IDNow, Munich was a no-brainer in terms of location for their business: “We saw Munich as the ideal city to build our product,” says Sebastian Bärhold, the Co-Founder of the FinTech startup, “Even though there is a higher salary level here compared to other cities, we are willing to pay that in order to get the quality of talent we need. Thanks to Munich’s universities there is also no shortage of skilled labor.”
Many looking at Munich’s tech development wonder if the influence of big industry in Munich is more of an advantage or disadvantage for startups located in Amsterdam? A number of successful startups have emerged from Munich, notably eGym, Hetras, Holiday Check, Metaio, WestWing and Windeln.
Gabriele Böhmer, editor of Munich Startup, explained that while corporates can be powerful partners for startups, big industry players are also tough competition for top talents. However, she concedes that overall “it is more of an advantage than disadvantage, not just for startups, but for both sides as big companies are in need of innovation.” For software developers, this is clearly an advantage.
The question for software developers in Munich then should be how to choose between startups and corporates? For David Drews, Product Manager at Aboalarm, it comes down to preference: “Working for a startup is a cultural question that talents have to ask themselves. At Aboalarm, we are a super young team, the average age is in the mid-20s, which keeps the workplace dynamic and agile.”
What programming languages are most in demand in Munich?
Of the 200 companies we featured on the Munich Tech Map, 165 of those had publicly available information about their tech stack. We used data from the careers websites of the companies featured, from GitHub, from Angel.co and from company profiles on Honeypot.
In order to calculate the most popular programming languages in Munich, we looked at the frequency of mentions of a particular programming language across all companies. Thus, if a company mentions Python and Ruby within its tech stack, then each is counted once. The frequency of mentions of each individual language was then calculated as a percentage of total companies with their tech stack publically available.
Here is what we found.
The three most popular backend languages in Munich are Java, PHP and Python. We found that 38% of companies used PHP in their tech stack, 30% used Java and 14% used Python.
We did a similar calculation for the most popular frontend frameworks. Fewer companies had their frontend frameworks listed publically, just 74 in total. From those companies, 55% mentioned Angular, 27% mentioned React and 9% mentioned Ember and Backbone.
Moving from developer to founder in Munich
If you are a developer looking to become a founder, Munich is a great place to base yourself. The city is dotted with corporate-backed incubators offering generous incentives to start tech companies.
Play is Sky Deutschland’s incubator. For those who qualify for the program, Play will give you €25,000, office space for six months to develop a prototype, and access to engineering skills. Wayra is Telefónica Deutschland’s startup accelerator, whose investments include Neokami, Foodora and Parkpocket.
While not directly owned by a large company, TechFounders, an accelerator, is backed by industry partners, such as Bosch, BMW Group and Siemens. The 20-week accelerator program brings tech startups together with industry partners and venture capitalists and requires no fees. Best of all, TechFounders takes zero equity.
The Bavarian government has a number of initiatives supporting local talent. BayStartUP is the Bavarian institution for company formation, financing and acceleration. It is supported by the Bavarian Ministry of Economics as well as by private sponsoring partners. GründerRegio M is an initiative of the science and business region of Munich fostering knowledge-based spin-offs and start-up companies linked to higher education institutions.
Life in Munich
Munich’s location - close to Italy and Austria - makes it a great location for outdoor enthusiasts. Toby Martin, Head of Software Engineering at Bragi, said Munich is a great place for developers to be: “What we find is when we recruit from other countries, we find that is easy to attract people to Munich because of the place that it is. Munich can be a difficult place to move to because it’s expensive. One-person flats are very expensive and hard to find. But once people have settled in they enjoy the vibe.”
Harald Wagner, Head of Business Plan Competitions at BayStartUP, a support network for entrepreneurs in Bavaria, reaffirms Munich’s relaxed atmosphere is one of the highlights of the city, mentioning, “I believe a big plus for Munich is not only the bustling tech scene, but also the Bayerische Gemütlichkeit (coziness) and Biergarten Flair, which are factors that keep many people in the city.”
Ultimately, Munich’s appeal for software developers is the variety of jobs offered in the city, a bustling tech spirit and a relaxed atmospherse in the city.
…Oh and there is always Oktoberfest.
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