While COVID has accelerated remote-first products and processes, we still believe that people will flock back to startup hubs such as Berlin or Munich, especially given the relatively low cost of living compared to other tech hubs like San Francisco.
While our investment strategy on a high level will not change, we are putting longer sales cycles into consideration as potential customers of our portfolio companies now are focusing on capital efficiency which also holds true for our founders.
Thus, we are excited about founders working towards that future and finding answers across multiple industries, such as manufacturing or logistics, across all working-classes, and across different eras – before, during and after COVID.
Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
We are lucky in that our investment focus has been on sector verticals such as Logistics, Supply chain, manufacturing or the future of work, which have all captured significant tailwind from Covid.
As our economy is still in the midst of dealing with the effects of COVID, it is too early to tell, but we definitely see positive indications driven by efforts of portfolio companies that could adapt quickly and shipped features catered to the current needs.
Nevertheless, we will continue to see an increasing number of companies scattered across multiple time zones building products that are inherently remote first, regardless where the general work environment will shift into.
Berlin and other German cities have consistently proven to develop and grow new leaders across multiple categories such as banking (N26), mobility (Flixbus and Lilium), or data analytics (Celonis).
This is certainly driven by a mix of talents coming out of world-class educational institutions, the relative low cost of living in tech hubs, and large local incumbents with massive capital to invest and spend.