UnternehmerTUM tops ranking of Europe’s leading start-up hubs

The author is a writer for Sifted, an FT-backed site for European start-ups

Ask the founders at any fledgling Munich company how they got their business off the ground, and they are likely to mention UnternehmerTUM, the start-up lab of the Technical University of Munich (TUM), that was set up in 2002 by German heiress Susanne Klatten.

The non-profit organisation offers 20 programmes that support start-ups in the essentials of creating a company: from building a prototype, to pitching to venture capital groups, and learning how to be a chief executive.

Each year, 5,000 people take part in start-up programmes at UnternehmerTUM, and 50 new businesses are created.

One of the lab’s key strengths, note founders and VCs, is its sprawling network comprising industrial groups, such as Airbus and BMW, small and medium-sized enterprises, regional and international universities, VCs, and the Bavarian State Ministry of Digital Affairs.

Each partner provides something different to help young companies grow — such as capital, connections, or becoming customers of the start-ups. And, as a result of these strengths, UnternehmerTUM tops the FT-Statista ranking of Europe’s leading start-up hubs in 2024.

“Our USP is that everything is highly integrated,” says UnternehmerTUM’s co-founder and CEO Helmut Schönenberger, adding that many of the start-up lab’s 400 employees are former students of TUM.

He explains that, while 40 per cent of the lab’s financing comes from private investors and German state financing, 60 per cent is from corporates that play an active role in the organisation. They hire talent from the university and collaborate with start-ups from UnternehmerTUM to bring innovative tech solutions to market.

One such initiative, dubbed Circular Republic, was launched in partnership with BMW to bring together corporates, start-ups and academics with the aim of creating solutions for the circular economy: from battery recycling to electric mobility. “This is how you really team up and get enough power [to tackle] important topics,” says Schönenberger.

Many of the lab’s corporate partners are also limited partners in UVC Partners, a VC started by UnternehmerTUM in 2011 that is now independent. It has become one of Germany’s most high-profile tech investors, with €400mn in assets under management. Each year, UVC gets around 3,000 applications for funding from start-ups, globally, though it only makes 10 investments annually. Its portfolio includes German AI start-up Aleph Alpha and mobility group Flixbus, an UnternehmerTUM alumnus. 

Close co-operation with the university also ensures that entrepreneurship is seen as a viable career option for students early on — an aspect that Fabian Gruner, senior principal at German VC group HV Capital, says makes the hub so “successful” at rolling out high quality start-ups.

Students at Munich’s technical university are able to take part in programmes at UnternehmerTUM as part of their degrees, where they are able to receive the same amount of credits as for an academic course. This also helps ensure academic research is transferred to society in the form of commercially viable products and services.

“UnternehmerTUM gives this ‘I can do it’ attitude, which raises the level of ambition among entrepreneurs,” observes Benjamin Erhart, general partner at UVC Partners. “It’s not just teaching [entrepreneurial] techniques, but mindsets.”

Indeed, Schönenberger says that the aim of its programmes is to allow entrepreneurs to test out ideas, even if they eventually fail. The lab’s three-month incubation programme for very early stage start-ups, is the most popular. 

Start-up fundraising was difficult last year: in Germany, VC funding dropped from $12bn in 2022 to $8.3bn in 2023, according to Dealroom data. But UnternehmerTUM hit a new record: its start-ups raised $2bn across 100 financing rounds, numbers unmatched by other German universities. 

Schönenberger says that UnternehmerTUM’s model is more “stable” than other labs because it has a tried and tested formula of producing start-ups, which it has refined over a 22-year period. 

“[UnternehmerTUM] is like a factory with a production line of companies . . . It has such a momentum,” he says. “Last year was a bad year for the VC ecosystem and was a really tough year for our start-ups. But it makes a huge difference when you have . . . relationships with VCs and other partners, not only in Germany but in Europe and especially the US.”

Making an operation of this size run efficiently, however, is a “really tough management job” says Schönenberger, especially as the start-up factory is growing 20-25 per cent per year in terms of the number of employees, students and start-ups it supports.

But a successful start-up lab cannot rest on its laurels; it must adapt swiftly to keep pace with external challenges, such as technological change.

“Every month, a new technology comes along and we have to think: how do we incorporate this?” says Schönenberger. “Do we set up a new course at the university? How do we build up infrastructure for this technology? How can we find partners for that? How can we fundraise and win new partner companies and investors? It’s constant.”

UnternehmerTUM now has plans to replicate its model in other locations. The organisation is partnering with Germany’s Federal Ministry for Economic Affairs and Climate Action to build 10 start-up factories in the vicinity of universities in an attempt to produce more successful start-ups, and turn Germany into a leading start-up nation.

“It comes back to what Susanne [Klatten] was saying 20 years ago,” says Schönenberger. “If you want to preach entrepreneurship, you have to be entrepreneurial yourself.”

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