A new career in a new town

How Berlin has become a centre for European venture capital

FOR BRITS of a certain age and inclination, Berlin is a city that is forever linked with David Bowie. When he lived there in the late 1970s, Bowie’s life was in flux. He was estranged from his wife, splitting from his management and trying to slough off rock-star excess. Berlin was similarly unsettled: a refuge for artists, misfits and draft-dodgers on the front line of the Cold War. Bowie lived anonymously above a car-parts store. He did some of his best work there.

The block of flats where Bowie lived with Iggy Pop, another celebrated rock star, still stands. Berlin remains an edgy, in-between sort of place—it is Germany’s capital, but is not quite German. And it remains a place where people go to try something new. It now vies with London and Paris as Europe’s leading hub for technology startups.

That seemed unlikely a decade ago. Berlin had no real industrial base. Its early venture-backed successes were often knock-offs of American e-commerce firms. Risk capital was…