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The top 6 European cities for startups in 2015 and the companies to watch

10 min read

06 January 2015

Former deputy editor

London is often viewed as a key player in the European startup world, especially when it comes to technology, but there are other cities on the continent that new businesses should consider building in too.

Mid and long-term rental accommodation service Nestpick has selected Europe’s top six cities on the startup scene which are providing promising and encouraging environments for businesses in 2015.

Berlin

The German city has been considered “perfectly placed to become Europe’s leading startup hub”, and it’s set to generate more than 100,000 new jobs by 2020, which is a result of the rise of small new businesses.

SoundCloud is one such business that has achieved success with its headquarters in the city, and despite having originally been founded in Sweden, it was established in Berlin in 2007. The social community-based music sharing service reached 175m monthly unique users in December 2014 and counts Ashton Kutcher among investors.

Other startups that opened in the city to achieve results include ecommerce incubator Rocket Internet, mobile and social game develop Wooga, and online retail company Zalando.

Three to watch:

1. EyeEm – We’ve all seen the rise in popularity of Instagram and EyeEm is a filter-based photo app that comes with added photography tutorials
2. Adjust – A mobile data analytics specialist that provides developers and advertisers with insights on how apps are performing
3. Frestyle – This platform allows music venues and promoters to spread the word about their latest events, enriching profiles with videos and photos, while they have the option of paying to receive customer data

Image via Shutterstock.

Budapest

This Hungarian city is noted for its plethora of startup accelerators, funding opportunities and co-working areas, all of which led Nestpick to call it “one of the hidden champions among entrepreneurs”. Budapest is cheap compared to other Western European cities, while young locals have advanced educations and the internet across the city is fast.

Although remote IT services provider LogMeIn is currently headquartered in Boston, supporting more than 125m devices globally with an employee body of approximately 600, the business was founded in Budapest. Indeed, the city is one of only two homes to development centres – the other being in Hungary also, in Szeged.

Cloud-based presentation platform Prezi and HD video service Ustream were also launched in Budapest.

Three to watch:

1. Rate My Speech – Described as a learning management system, Rate My Speech allows speech coaches to expand their services with a platform that lets them provide trainees with a digital classroom where they can collaborate together
2. Doklist – This price comparison service allows patients to compare medical services based on price, trust rating and more, enabling users to reach doctors most suited to their needs
3. Drungli – Claiming its target audience is a young, frequent, avid traveller generation, Drungli is a speedy flight and hotel search engine that makes the cheapest options available to book in seconds

Image via Shutterstock.

London

The UK’s capital has been recognised for its burgeoning innovation with Tech City, growing naturally alongside government funding to the tune of £50m – encouraging new businesses to get started. This balances the otherwise expensive city. Meanwhile, its business schools are considered “magnets for entrepreneurs from all over the world”.

There are many success stories to come out of the UK, and Shazam is perhaps one of the most prominent ones, having become something of a household name for most smartphone owners who appreciate music. The sound recognition app originally detected the details of songs playing, but moved into the broader media market by partnering up with big brands such as Jaguar, Super Bowl and Gillette to redirect TV viewers to exclusive competitions and promotions by detecting adverts, which helped it top 500m downloads in 2014.

Three to watch:

1. Cereal Killer Cafe – Real Business spoke to founder Gary Keery about his idea for the breakfast venue, which sells cereals from around the world between 7am-10pm each day. It’s already secured a cult following from 80s and 90s kids
2. Qriously – The question-based advertising network sends queries to mobile users, in turn enabling brands to secure data and serve targeted adverts to the respondents
3. Brainient – Disney, Warner Bros, Coca Cola and ASOS are among the clients using the BrainRolls service, which allows the distribution of video campaigns across devices

Image via Shutterstock.

Barcelona

Nestpick says it’s unclear whether Barcelona has grown “despite the crisis or because of it”, but the city is now home to more than 200 digital startups in B2B, gaming, ecommerce and travel, making it an ideal place to get the entrepreneurial venture up and running. The Spanish government is praised for improving conditions for tax breaks and funding, further enabling the businessman or woman to advance.

Social Point is a social network game developer that launched in Barcelona back in 2008, and it has grown to more than 200 members of staff and 50m monthly active users across mobile and the web.

Three to watch:

1. Dribble Dots – This Spanish startup is looking for acclaim with its range of cooking oils, with the foodie-focused firm out “to be one of the first success stories of a Barcelona-born company”
2. Tiendo – A commerce concept that allows shoppers to browse products and deals online, which can then be purchased locally at stores in the area
3. Robot Media – Nosy Crow is a children’s book publisher producing tangible novels, ebooks and apps for kids, which secured it a Growing Business Award in November, but Robot Media’s Storyteller platform allows anyone to create digital children’s books

Image via Shutterstock.

Amsterdam

The entrepreneurship rate in the Netherlands is listed as six per cent higher than the rest of Europe, aided by its rank as the “most creative global city” and “the world´s largest digital exchange platform,” according to Nestpick, which makes it appealing to communications and tech companies.

Amsterdam-based Peecho is a cloud-based platform that allows websites to connect to print facilities globally, effectively making digital products become physical, whether the items are photos, magazines and so on. Clients include Deloitte and even Disney, which launched an app with Peecho integration in February 2014 to promote its film Blank, thus allowing users to print themed greeting cards.

Three to watch:

1. Peerby – An online rental service not entirely unlike the concept behind Airbnb, albeit one that lets users virtually ring neighbours’ doorbells to borrow items – and presumably sugar – within 30 minutes
2. CardCloud – You may have forgotten your business card at the office, so CardCloud is designed to transmit a digital version to acquaintances in just three taps
3. Intelworks – A cyber security platform that detects, prevents and responds to threats, with tools growing in accordance with the size of the user’s system

Image via Shutterstock.

Tallinn

The Estonian city of Tallinn has no shortage of angel investors, while the government-backed SmartCap project co-invests alongside angels to “revolutionise the startup scene”. 

Of course, video calling service Skype has a lot to do with this. It was launched in Tallin in 2003 and later acquired by eBay two years after for $2.6bn before being bought by Microsoft for $8.5bn in 2011. While the head office is now divided between Luxembourg and Washington, the majority of the development team and almost half of overall employees are split between Tallin and fellow Estonian city Tartu.

Three to watch:
1. Fleep – A B2B communications tool that allows teams and businesses to message each other freely. No signup is required and users outside of the company can be added via email address – it’s made by ex Skype staff
2. WellBiome – This is a nutrition company with a difference, the difference being that the diet plans are provided based on the bacteria found in individuals’ stomachs to ensure optimum results
3. Flirtic – We’ve had Plenty of Fish, swipe-based Tinder and more, but Flirtic truly makes dating a game by matching people based on the results they achieve on quizzes and games

Image via Shutterstock.