July 26, 2021

the revenge of Munich, German “Silicon Valley”, against Berlin

A warm, silky-haired little head landed silently on our knees. It’s Hachiko, the office manager’s English cocker spaniel, who comes begging for a caress. The affectionate contact of the animal brings unexpected comfort: Covid-19 obliges, the premises of the start-up Celonis, in Munich, are almost deserted. Anyway, the company’s activity is done entirely in the cloud (cloud computing).

The dog’s random comings and goings, which do not produce any digital traces, offer a striking contrast with the world of this start-up specialist in process mining, a computer technology that maps all the operations of a company, or “process”, in order to optimize them using artificial intelligence. Founded in 2011, Celonis became a celebrity at the beginning of June: it is the first young German shoot to have become a “decacorne”, an unlisted company valued at more than 10 billion dollars (8.4 billion euros ), a club that is still very small in Europe.

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Only Swedish fintech Klarna currently has a higher valuation, at 46 billion. With its spectacular fundraising in June, which boosted its valuation to $ 11.1 billion, Celonis has put the spotlight on the growing power of Munich’s tech ecosystem. The Bavarian capital is taking its revenge on Berlin, which still captures the lion’s share of venture capital investments and enjoys a more alternative and internationally connected image.

Convincing experience

The two ecosystems are opposed: where the Berlin scene is dominated by models intended for the end consumer, often in e-commerce and finance, Munich claims its “deeptech” positioning (intensive in breakthrough innovation) and its proximity. with the traditional German industry, very close. “Berlin is comparable to New York, Munich to Silicon Valley”, summarizes Peter Borchers, professor at ESCP business school, who knows both cities perfectly.

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The history of Celonis is emblematic of this Bavarian specificity. Originally, three mathematics students at the Technical University of Munich (TUM), Martin Klenk, Bastian Nominacher and Alexander Rinke, took part in a student council assignment for Bayerischer Rundfunk, the Bavarian regional radio and television branch. Responsible for improving the functioning of customer service, they develop a system that creates a graphical representation of all operations carried out by the company. Like an x-ray image of a human body.

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