Munich: How Celonis became the most valuable German start-up – Munich

“We’re still at the very beginning,” says Bastian Nominacher. “But we think we have one generational opportunity have, as they say in Silicon Valley.” An entrepreneurial opportunity that only comes along once in a generation. “We” are three former Munich students who have been doing their own thing for eleven years: the computer scientist Martin Klenk, the mathematician Alexander Rinke and Bastian Nominacher, who is a business IT specialist and financial mathematician.While they were still studying, they founded a company that became a Munich success story: Celonis.

More than 1,300 customers, including well-known corporations such as Bayer, Lufthansa and Deutsche Telekom, and an enterprise value of more than twelve billion euros make Celonis the most valuable German start-up. The company now employs 3,000 people. Where does success come from? “Celonis has technology that can help any company in the world,” says Nominacher. The IT company develops software that turns the impenetrable thicket of data in companies into a valuable raw material.

Celonis recognizes problems in business processes, inefficiencies, idling or excessively long response times. This and much more is hidden in the data. For example, the software detects where and why there is a problem in a supply chain, or which invoices a supplier has sent twice. It is also often about so-called wild shopping: employees order goods without using framework agreements with suppliers. The program helps to recognize such problems – and to solve them. This saves companies a lot of money.

The Munich students have found a huge gap in the market. But Celonis is just one of many highlights of the new Munich business scene. There are many more to discover with Flix, Ionity, Personio, Agile Robots, Scalable Capital, Isar Aerospace, Tado and more. Some of these companies employ thousands of people and have become engines of growth for the city. But they are not yet as well known as the city’s Dax companies.

“We had the data and we knew: This is the answer.”

Word is only gradually getting around that Munich, along with Berlin, is increasingly becoming a metropolis for start-ups. There are many reasons for this, and Helmut Schönenberger patiently enumerates them: “There are excellent universities and colleges on the Isar. There are established corporations such as BMW and Allianz, which are increasingly opening up to start-ups and are becoming their first customers. There are strong support from the city with institutions such as the Munich Urban Colab and the Makerspace. And finally, investors from all over the world are coming to Munich more and more often to invest money.” It is Schönenberger’s passion to lead promising start-ups to success and to get people excited about innovation. He is one of the founders and CEO of UnternehmerTUM, a non-profit GmbH that does a lot to make Munich an attractive place for young founders.

The three Celonis inventors met in the Academy Consult association, a student management consultancy. That was in 2010. Your job: You should get the sluggish IT service of Bayerischer Rundfunk going. When a password needed to be reset or a printer was not working, it often took several days for help to arrive. “We quickly saw that we couldn’t get any further with classic methods such as interviews and the brown paper method, in which processes in the company are visualized by hand,” says Nominacher. “But we really wanted to help.”

In a seminar they had heard for the first time about the then still new discipline “Process Mining”, which is now the core business of the company. So the students read it up again and found the key to the solution in an essay by Professor Wil van der Aalst, the Dutch computer scientist and “godfather” of process mining. Van der Aalst had laid the theoretical foundations. But it still took three Munich students to put his knowledge into practice.

“We had the data from BR’s IT service and knew: This is the answer,” says Nominacher. “Only there was no good software to evaluate them.” So the three friends got together in Nominacher’s apartment and wrote the first version of Celonis in three months. Nominacher still likes to remember this beginning: “The customers at BR were delighted because we were able to shorten the processing time for the IT service from five days to one.”

Open detailed view

Celonis had managed to take Process Mining from theory to practice and grew bigger and bigger in the years that followed. “In the beginning, companies were still very skeptical when we presented our software to them,” says Nominacher. “But we kept coming across innovative managers who gave us a chance. And then we had to prove ourselves.”

One of the first customers was the chemical and pharmaceutical group Bayer. The company wants to become more digital and efficient in order to continue to play a leading role in the market. Timo Peters has been responsible for process mining there since the beginning of September 2022; he had previously taken on this task at Nokia. Peters is to introduce data-driven process analysis across the group. The X-ray vision of the Celonis software is to be used everywhere in order to optimize processes in the global company.

Like a bunch of spaghetti that needs to be unraveled

According to Peters, the beauty of Process Mining is: “On the basis of facts, we see what is going wrong and can initiate improvements directly.” In large companies, such insights can save hundreds of thousands of euros. They can keep customers and employees happy when tangled supply chains are unbundled and goods are delivered more quickly. “A large proportion of orders do not follow the ‘happy path’ that would make economic sense,” says Peters, “but dozens or even hundreds of different paths.” In the Celonis visualization, instead of the desired linear process, you see a pile of spaghetti that needs to be unraveled. Therein lies the optimization potential.

Process mining is diverse. Today, Celonis has customers in almost every industry: car manufacturers, logistics companies, retailers, clinics, airlines and many more. Small and medium-sized companies also use the software. As the number of customers grew, so did the number of employees at a remarkable rate: in the past year alone, 1,000 positions were filled, and more than 100,000 applications were received. Many candidates come from Munich and have studied at the TU, the LMU and the Munich University of Applied Sciences. “We have an incredibly good talent base here,” says Nominacher. “There are over 10,000 computer science students in Munich.”

Open detailed view

Jerome Geyer-Klingeberg maintains contacts with the universities. He knows Nominacher from the TUM alumni network and is now head of the “Academic Alliance” at Celonis. The company started early to invest in collaborations with researchers, in software for universities and projects with students. “Today we work with 800 universities worldwide,” says Geyer-Klingeberg. “But our alma mater is TUM. We work with more than 20 professors in business administration, computer science and mechanical engineering.”

On the one hand, it is about research. Process Mining is a science whose theoretical basis is being further developed at universities and whose practical application Celonis thrives on; currently there are around 40 academic research projects running. On the other hand, it is also about teaching students the “skills they need in their job”. Jobs abound here. “We’re talking about a labor market of 10,000 to 20,000 jobs worldwide that’s growing exponentially,” says Geyer-Klingeberg.

Philipp Wiegand is one of these students. He was fascinated by Silicon Valley as a tenth grader and always wanted to study abroad. “Then I saw what California has done, it’s happening in Munich.” He stayed and studied at the TUM in the Bachelor Technology and Management, now he is studying in the Master Finance Information Management (FIM). “Basti studied that, too,” says Wiegand, referring to Bastian Nominacher. “What’s super cool: In the first week, all the young entrepreneurs who had founded in the FIM context came to the university and presented their companies.” Celonis was also there. “They are always well represented. Many of the course are now working at Celonis,” says Wiegand, who has also founded the company himself.

“Munich has huge potential,” says Celonis boss Bastian Nominacher. “When we started eleven years ago, I was the only one from my entire year who founded a start-up.” Jerome Geyer-Klingeberg, the Celonis representative for university cooperation, estimates that between 30 and 40 percent of students now want to start a business. “It turned out sexy and interesting.”

Celonis

Smart, successful, forward-looking: The SZ presents the most valuable start-ups in Munich in a series. In the next episode, read how Ionity provided the whole of Europe with a fast charging network for e-cars in just five years.