Getting started in Bavaria with future technologies

During the 2nd French-Bavarian Oktoberfest Start-up Meeting we discussed the promising expansions of markets and technology areas in Bavaria and France with Audrey Soussan, Principal at the VC firm Ventech. Representatives from three French start-ups also answered questions on which steps have to be considered and implemented for expansion into Germany and where the greatest challenges lie. Read the summary here:

Future technologies in Bavaria and France

Ever-advancing digitalisation is a global issue. Key fields have been identified in Bavaria that are to be specifically strengthened using future initiatives: cyber security, artificial intelligence, assistance robotics, 3D printing and intelligent electronics components for Industry 4.0, for example. The measures are being pooled at the Zentrum.Digitalisierung.Bayern. Close networking is taking place here between business and science. Numerous global players are running IoT and innovation labs in Bavaria in order to shape the future together with industry.

Ventech fits into this picture well. The VC company with locations in Paris, Munich, Helsinki and Shanghai invests exclusively in tech companies, or more precisely, companies that develop and market software and hardware. Two key observations that Ventech makes in its international work and in particular when comparing Germany and France:

1. The markets are getting closer

The demand for intelligent hardware and software solutions for digital transformation and to sustainably boost competitiveness has increased in both France and Germany, and particularly in Bavaria over the last few years. Consequently, Germany is proving to be a natural sales market and target country for international expansion, behind France.

2. Regional tech hubs in Germany vs. the main hub in Paris

There are different regional industry focuses and business centres within Germany. It is therefore also necessary for some companies to open several locations. Southern Germany is an extremely attractive business location, particularly for companies who see their clientèle in the high-tech industry. Read more about the regional business opportunities in the paragraph below.

You’ve done it! Success factors for expansion

Our three start-up representatives, Agnès Bazin, Head of Growth at Doctolib, Christophe Raix, Co-Founder & COO of Scortex and Timo von Focht, Country Manager DACH at Commanders Act sum up their expansion into Germany in just a few key phrases: high quality awareness, the recruiting challenge, regional business opportunities, the warm reception. The quintessence of our discussion:

High quality awareness

German customers generally place great importance on superb product and service quality. Companies can make a very good impression in customer relationships by being highly reliable. Promising something for marketing reasons, which then can’t be delivered, should be avoided in order to not damage the relationship of trust with the customer.

The recruiting and management challenge:

1. Use virtual (e.g. Xing & LinkedIn) and real (e.g. customers, partners, other companies that have already expanded into Germany) networks!

2. Instruct a personnel consulting firm with professional and regional expertise! Invest in Bavaria is happy to assist with contacts.

3. Look out for international experience with profile selection. Good communication based on trust is crucial for the success of an independent business unit abroad, which adapts to the market and local conditions but remains well integrated in the parent company at the same time.

4. Promote mutual exchange: regular visits by company management or responsible staff to the foreign branch and business trips by the branch manager to head office build trust and keep the flow of information on track.

You can find more tips for recruiting professionals and useful information about the regulations that have to be complied with when employing foreign staff (in particular from third-party states) in our blog.

Regional business opportunities

Germany definitely cannot just be reduced to just its capital city. Munich is in fact the (domestic) German business metropolis. The reason for this is above all the Bavarian economy’s diversity. Besides trade and services, the processing industry contributes an above-share (27.3% in 2016) to the gross value. The processing industry’s core sectors include mechanical engineering, the automotive and electrical industry as well as aerospace. While the major, leading global companies are concentrated in Munich, expanding companies should not underestimate the huge potential to be found in rural areas too. Hidden champions, companies who are among the global market leaders on their niche markets but are generally unknown, are distributed throughout Bavaria.

A warm reception

There are numerous stakeholders who assist you with expansion into Germany. Make good use of them! Together with the German Chambers of Commerce Abroad (e.g. AHK France), business development in both countries like Business France and Germany Trade & Invest, banks (e.g. bpifrance Le Hub) and last but not least the La French Tech government initiative, we, Invest in Bavaria, form a close-knit network that supports you with various kinds of market entry and export through to settlement. Please do not hesitate to contact us for more information.

We rounded off the evening at the Oktoberfest in Paris – that’s networking à la bavaroise.