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Digital Economy

Digital Economy News | Spring 2021

Germany's vibrant start-up landscape has seen an increase in new companies in 2020, with domestic and international investors alike bringing innovative products and services to the German market.

Merkel supports AI Breakthrough Hub

The German Federal government and the State of Baden-Württemberg have announced plans to significantly increase their support for Tübingen as a location for excellence in artificial intelligence (AI) research and innovation. Several hundred million euros will be set aside for AI research and development, including EUR 100 million from the Hector Stiftung, a foundation established by SAP co-founder Hans-Werner Hector. Speaking at the launch at the end of last year, Federal Chancellor Merkel said that “[As] part of the Future Package, we have pledged an additional two billion euros for AI. The investment should serve as a catalyst for state-of-the-art computing infrastructures, attractive conditions for top talent, and forward-looking AI ecosystems.” The AI Breakthrough Hub project, funded by federal and state governments as well as the private sector, will be developed at the Tübingen AI Center, the joint competence center for machine learning of the University of Tübingen and the Max Planck Institute for Intelligent Systems.

E-commerce better for the environment

Online retail outlets cause fewer CO2 emissions than their bricks-and-mortar retail counterparts according to a study carried out by Oliver Wyman and Logistics Advisory Experts. Online retail sales rose by around 20 percent last year, with more consumers shopping online because of the coronavirus pandemic. According to the authors of the study, consumer guilt at the increased presence of couriers and delivery trucks on German streets is offset by their conclusion that online retail has a better carbon footprint than traditional retailing. The study finds that C02 emissions in stationary trade are on average 2.3 times higher per product than is the case in the e-commerce sector. Climate-friendly practices are becoming the norm for a number of companies, with concrete measures to avoid and reduce CO2 emissions now part of core processes.

Number of start-ups increases in corona year

A market analysis of Germany’s start-up landscape in 2020 shows an increase in the number of start-ups, particularly in the e-commerce, food, education, and gaming sectors. The report, conducted by Startupdetector, finds that more than 2,800 new companies were established in 2020 – equivalent to an increase of around 13 percent. The obvious difficulties caused in the retail, education and home office sectors caused by the pandemic saw new start-ups clearly focus their activities in these areas. However, more start-ups probably would have been founded were it not for the Covid-19 crisis, with an average of around 26 percent more start-ups in the first quarter of the year.

UK sports software developer opens site in Cologne

SBG Sports, a London-based developer of sports software tools, is strengthening its presence in the DACH and Eastern European regions with a new site in Cologne. The company’s software solutions are used to analyze training sessions, matches and competitions in a number of sports including motor sports, football and rugby.

Online DIY platform seeks growth in German market

The coronavirus pandemic has increased e-commerce levels in the German DIY sector – although total share of sales remains comparatively low with consumers preferring customer-facing services. Mano Mano, an online marketplace for DIY products, is seeking to redress the situation with the launch of an online customer service platform to provide personal advice and information to online customers. The company, active in the DIY market since 2016, is seeking to differentiate itself from market giants like Amazon and eBay through its “Manodvisor” service in order to realize German retail volume of EUR 500 million by 2024. The company raised EUR 125 million funding from major investment firms including Temasek and General Atlantic in a funding round earlier this year.

Russia’s biggest online shop plans German expansion

Russia’s biggest online retailer Wildberries is planning to enter the German market. The concern launchedits Wildberries online platform in Germany in January as part of its central European expansion plans.  The company currently enjoys thirteen percent share of the Russian market, generating turnover of EUR 5 million and employing a workforce of more than 50,000 people.

National launch for digital logistics cloud platform

Hamburg-based start-up driveMyBox has announced plans to roll out its digital platform across Germany after initial success in southern Germany. The cloud-based platform allows clients and service providers to handle the transportation of trucks and containers in an easier and safer fashion. The free platform has been designed to meet the needs of independent trucking and transportation service providers, allowing live tracking, automatic payment processing and digital documentation.

Bosch and Continental sign up for start-up technology

Bosch and Continental are among the backers providing USD 48.9 million venture capital funding to American-German start-up Recogni. The San Jose and Munich-based company has developed a sensor technology solution that allows real-time object recognition for autonomous vehicles. Its vision cognition module platform has been specifically designed for autonomous vehicle from entry level (L2+) through to full autonomous vehicles (L5).

Chinese manufacturer signs up for Munich IoT platform

Munich-based start-up Emocean has already found a Shanghai-based investor for its Indigo platform after its recent launch.  Justech has invested a six-figure sum in the German company, with plans to integrate the platform into is own products. Founded just a year ago, Emocean provides an Industy 4.0 middleware solution for smart factory production. The company already deploys its real-time solution in the supply chains of a number of major smartphone manufacturers and automotive groups. The start-up is positioning itself as an automation specialist with plans to make the platform operate as an industrial app store.

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