Anyone founding a start-up in Germany still often does so in Berlin. But the Bavarian state capital is now blossoming into a financially strong alternative – thanks to an initiative founded around 20 years ago.

“UnternehmerTUM” is what many companies call the starting point of their successful history. The Munich Innovation and Start-up Center of the Technical University (hence the name) has so far spawned around 550 companies. These include the air taxi start-up Lilium, which is now listed on the stock exchange and is based just outside of Munich.

And Lilium is not an isolated case. In its most recent study on the German start-up landscape, the auditing company EY certified Munich and the Free State of Bavaria as being in excellent condition. A quarter of all the capital that flows into start-ups in Germany goes to Bavaria – a good 4.4 billion euros in total.

Although Berlin collects 60 percent of the risk capital collected, Munich is still a popular location for many founders. Helmut Schönenberger, founder and CEO of UnternehmerTUM, said to the FAZ: “What distinguishes us in Munich is that we have managed to pool our strengths.” In addition to Schönenberger UnternehmerTUM, many also consider the “GotoBavaria” initiative, founded in May 2000, to be the core of the today’s success.

The Berlin start-up scene is strong, but “there is no ecosystem with the universities there.” Schönenberger continues: “In southern Germany we are fortunate to have a lot of industry. In addition to large companies, there are also medium-sized companies and international corporations such as Apple and Microsoft that have their German and European headquarters in Munich. This is an insane substance.”

It is also these companies that often act as financiers for founders. And thanks to the links with the Technical University of Munich, many start-ups have a technical or industrial background – such as Lilium.

And it’s not just EY who certifies that Schönenberger and his UnternehmerTUM have done an excellent job, TUM is also the only German institution to make it into the top 10 of European spin-off universities in the ranking of the start-up platform Sifted/FT. Even ahead of Oxford, St. Gallen or HEC Paris.