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Britain’s plans to leave the European Union (EU) will be good news for Germany’s startup scene, a major German venture capital provider said.
According to Christoph Gerlinger, CEO of Berlin Startups Group, Brexit will see London lagging further behind Berlin.
“The Brexit is good news for the German startup scene. Only since 2015 was Berlin able to surpass London, the previously dominant hub of Europe, in the number of and overall volume of financial transactions from startups,” Gerlinger explained in a statement.
“This development will now accelerate and the distance between Berlin vs. London will increase. We expect a significant decrease in new incorporations in London in favour of Berlin, as well as an influx of successful London startups,” the CEO continued.
He also said that this migration to Berlin would be “particularly true” in the fintech sector.
Immediate effects of Brexit?
Companies within the portfolio of Berlin Startups Group added that they don’t expect an immediate negative impact as a result of Brexit though.
“One of the core holdings of German Startups Group, Auctionata, which according to its own records is the largest global online auction house for art and luxury objects, even expects a positive impact,” the provider said.
Another company, MisterSpex, expected a “mutual positive and negative” effect.
“This could be true for all other larger startups, for whom England is a target market and also the location of competitors.”
‘London is the loser’
The German Startups Association also expressed similar sentiments to the Berlin Startups Group, saying Berlin was the winner of Brexit and London the loser.
However, the association said it was a victory they didn’t want to celebrate, as they didn’t see founders or entrepreneurs as German or British, but as European.
“An open and strong single market is the prerequisite for a strong start-up scene in Germany and Europe,” it added.
Featured image: Flickr/Theophilos Papadopoulos