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Corporate Germany's love affair with startups: Axel Springer Plug and Play Accelerator opens for applications Written by Charmaine Li on 19. March 2013

Axel Springer Plug and Play Accelerator

Axel Springer Plug and Play Accelerator

The Axel Springer Plug and Play Accelerator, a joint effort between the German media conglomerate and Silicon Valley’s Plug and Play Tech Center, has opened applications to its first three-month programme in May.

The accelerator promises early-stage startups from across the globe €25,000 in seed financing, office space in Berlin, networking opportunities and mentoring in return for a default five per cent stake in the company.

There are a growing number of startup accelerators in Berlin, including Startupbootcamp, Seedcamp and hub:raum among others – but Axel Springer Plug and Play Accelerator’s founding Managing Director Ulrich Schmitz told us he thinks the Berlin ecosystem still has room for more.

“We’ve teamed up with a Silicon Valley accelerator to connect the Berlin ecosystem with the Silicon Valley ecosystem, which is definitely an advantage,” Schmitz said, when asked how the accelerator would differentiate itself.

Ulrich Schmitz

Emerging trend – corporate Germany cozying up to startups

In the last year, German corporate giants Deutsche Telekom, ProSiebenSat.1 and Axel Springer have all launched their own accelerator programmes – hub:raum (also an incubator), ProSiebenSat.1 Accelerator and the Plug & Play partnership, respectively – to support “innovative” businesses.

So – why the sudden interest in the startup market?

Financial results provide one clue: In 2012, ProSiebenSat.1’s digital segment was the strongest growth driver and increased the company’s revenue by 38.1 per cent from the prior year, to €351.2m. Similarly, Axel Springer’s digital media segment contributed the biggest share of revenues last year and increased by 53.6 per cent, to €242.9m.

For these two companies in particular, the interest in online businesses and tech startups is likely linked to the unprecedented growth from digital activities. As for Deutsche Telekom, hub:raum mentor Christoph Raethke provided us with some insight on the telco’s affinity for Berlin startups:

… There are good reasons to believe that the pressure on corporations to become nimbler actors on the innovation stage has increased to a point where credible, speedy action is due.”

And it’s not only about accelerator action. Earlier this year, Axel Springer acquired social TV startup TunedIn and announced an investment in startup event and competition hy! Berlin.

While the corporate world clamourously fights for the attention of startups, the question remains: do startups want to get intertwined with the corporate world?

Image credits:
Ulrich Schmitz via Axel Springer

For related posts, check out:

Big guy, meet little guy: explaining Deutsche Telekom’s new love for Berlin startups
Axel Springer’s digital media activities overtake print for the first time
Axel Springer buddies up with Silicon Valley’s Plug and Play for new accelerator in Berlin