By Sam Shead

Since I was last in Berlin some five years ago, the tech start-up scene has really taken off, with a recent report suggesting that tech firms in the city created a whopping €8.9 billion (£7.3 billion) in sales in 2011 and another highlighting that tech companies now account for 25 percent of the overall companies in the city.

The two main venture capital (VC) firms in Berlin, Earlybird and Point Nine, are always on the hunt for the next big tech company and therefore they believe they are well placed to comment on what’s happening in the increasingly multinational city.

Maximilian Claussen, a tech investor at Earlybird, which has roughly €800 million (£656 million) at its disposal, told Techworld in Berlin that there’s definitely more capital available in London for tech start-ups. “Berlin’s tech scene is smaller compared to London. What the city is still missing is one or two household venture capital firms on the ground.

“But what I like about Berlin is that it’s not very formal and the cost of living isn’t very high. If you look at the people who start their business here, you’ll see people coming from every part of the world,” he said. “The degree of people coming from the engineering and product side is getting better and better all the time, making it easier to recruit and set up a team.”

Pawel Chudzinski, a partner at Point Nine, a VC that is gradually investing €46 million in mostly German tech firms, said he believes London is the best-funded city in Europe.

On Berlin, he conceeded: “It’s a cool city in general, not only for tech. There’s lots of art and other culture. It’s attractive to young entrepreneurial people and ever since I came here five years ago the growth of the start-up scene has been tremendous. Right now you have people from all over the world coming.”

Meanwhile, tech investor Uwe Horstmann from Berlin-based VC firm Project A said there are several Berlin start-ups that have been backed by US investors recently, such a Wunderlist creator 6Wunderkinder who has been funded by Silicon Valley heavyweight and Whatsapp backer, Sequoia Capital. “Americans are definitely starting to come here more often” he concluded.

Meanwhile, the number of new incubators – essentially spaces that act as breeding grounds for high-potential start-ups – is also rising, with Axel Springer’s Plug & Play, Berlin Startup Academy, The Factory and initiatives from companies such as Mozilla, Microsoft and Google, all taking off over the last few years.

So there’s clearly something happening in Berlin. But however loud the hipsters sing and shout about how great the city’s start-up scene is, it would appear that it has a long way to go if it wants to achieve similar levels of success to the likes of London and Silicon Valley.

Read the full blog post in Techworld here.