German Startups in the United States and Midwest

In recent years, private startups have been thriving in the United States: in 2022, there were?1,000 “active unicorns” in the US worth?$1.1 trillion in total. 1 In this article, we will explore the history of German startups in the US, examine how German investment benefits the US economy, and take a look at the future of startups in the US.

?History of German Startups in the United States:?

German startups began to enter the US market in the 1990s, with most businesses focusing on the tech sector in Silicon Valley. A new era of German startups emerged in the 2010s that specialized in e-commerce and financial technology and wanted to take advantage of the US digital banking and online retail markets. Today, the main industries for German startups in the US include automotive technology, industrial automation, and clean energy solutions.?

Startup Success in the Midwest:?

There are about 5,800 German companies, including startups, that are currently investing in the US market, culminating in a total investment volume of about $619 billion. 2? In the Midwest, the manufacturing, healthcare, and retail industries employ the most people. 4 With the four largest industries in Germany being automotive, mechanical engineering, chemical and electrical industry, the Midwest can appeal to German companies wishing to break into the US market because of the overlap of similar industries. 5 Further, the Midwestern United States is home to many populous cities with thriving industries that German companies could wish to move to.??

According to Midwest Startups, Chicago is the place to be in the Midwest for new businesses aiming to seize the US market: the Windy City is home to over 7,000 startups and has earned over $7 billion in startup funding in the past five years. 6 Further, in 2018, Forbes ranked Columbus, OH as one of the fastest growing cities for startups featuring low cost of living whilst being home to large corporate headquarters. Columbus has also become a center for healthcare startups, with over 1,200 companies created since 2012. Being home to some of the top universities in the country, the Midwest also offers companies access to top talent with recent graduates who chose to stay in the area.?

The Future of Startups in the US and Midwest:?

Forbes predicts that AI startups will gain more traction over other businesses due to the recent success of other AI companies. Health startups are also on the rise, with large company founders funding research on life expectancy. Finally, the number of electric vehicle companies is growing as this type of vehicle becomes more popular in the US market. EV sales are expected to increase 13 times by 2050. 7?

According to Aleph One, the Midwest has the potential to produce many new startups over the next ten years, worth over $1 billion in total. Factors such as the lower cost of living compared to Silicon Valley and the proximity to many Midwestern universities allows for growth potential. Furthermore, the Midwest is home to many Fortune 500 companies who can forge partnerships and mentorships with prospective startups in the region.?

Conclusion:?

While the Midwest may not be the first region that comes to mind when one thinks of startups, it has much to offer to German businesses wanting to enter a new market. If you are interested in breaking into the US market, check out our resources for German companies, from virtual offices to business partner search, and more!?

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Sources:?

1. Bloomberg (2022) https://www.bloomberg.com/news/features/2022-02-09/there-are-now-1-000-unicorn-private-company-startups-worth-1-billion-or-more??
2. https://www.germanbusinessusa.com/??
3. Deutsche Welle (2023) https://www.dw.com/en/is-german-industry-migrating-to-the-us/a-65031130??
4. Statistical Atlas https://statisticalatlas.com/region/Midwest/Industries??
5. Deutscheland.de (2023)https://www.deutschland.de/en/topic/business/germanys-industry-the-most-important-facts-and-figures??
6. Aleph One (2023) https://aleph1.io/blog/midwest-startups-how-entrepreneurs-are-thriving-outside-silicon-valley/??
7. S&P Global (2023) https://www.spglobal.com/commodityinsights/en/market-insights/latest-news/electric-power/100623-ira-impacts-expected-to-drive-up-ev-sales-more-than-double-previous-forecast??