London vs. Berlin: Which Markets Are Startups Going After?

It seems like every week there is a new article proclaiming Berlin as the “next Silicon Valley”, and one thing that is often mentioned is that startups from Berlin solve different types of problems and target different markets than startups in other European hubs, such as London.

At the time of writing, AngelList has 1,553 claimed profiles for startups based in London and 273 for startups based in Berlin. Each of these profiles includes up to four tags representing the markets that the startup operates in. Together this gives 4,246 tags in 531 different markets for London and 772 tags in 275 different markets for Berlin, allowing us to take a look at which markets are popular in each city and explore if startups in London and Berlin are going after different markets.

The data used below all comes from the AngelList API, a spreadsheet with the data used can also be found here.

Top 30 markets in London

Top 30 markets in Berlin

In London, the three most popular markets (by far) are Mobile, E-Commerce and Social Media; about a third of all of London’s profiles on AngelList have at least one of these tags. In Berlin, the most popular tags are similar to London’s, with the top 7 in both cities being the same markets (in a slightly different order). Out of the top 30 markets in each city, 23 appear in both lists.

To compare the cities, we can calculate the relative popularity of each market in each city as a percentage of all the market tags for that city, rather than comparing the absolute number of startups in each market.

London vs. Berlin: Top 30 Markets in each city as % of total market tags

London vs. Berlin: Biggest differences

The biggest differences as a percentage of the city’s total number of market tags:

London: Social Media, Financial Services, Analytics, Sports, Big Data, Retail, Small and Medium Businesses, Design, Online Travel, Food and Beverages, Big Data Analytics, Finance, Advertising Platforms

Berlin: SaaS, Marketplaces, Facebook Applications, Mass Customization, Reviews and Recommendations, Web Development, Crowdsourcing, Printing, Venture Capital, Communities, Consumer Internet, Social Commerce, Software, Music, Incubators, Hotels

The market tags on AngelList seem to fit the narrative. London has a larger proportion of startups tackling markets such as FinTech, Big Data and Analytics with other strengths that the UK is said to have such as Retail and Sports. Berlin’s startups are focussed on SaaS, Marketplaces and more consumer-oriented markets such as Facebook Applications, Mass Customization and Reviews and Recommendations.

With the small number of startups on AngelList from Berlin (273 vs. 1,553 in London) the numbers are easily skewed. For example, Berlin has four Printing startups while London has none. But, overall the results seem to align with the typical image of startups from London and Berlin.