I am living in Germany and have noticed a weird kind of startup niche that I have not witnessed elsewhere.

Usually found in some notable student city, this startup has 3 to 4 technical co-founders, all with Ph.ds and none with industry experience. Their product/service is some highly technical idea still in research phase. Their only output is publications. Some have a small number of employees, usually developers writing helper code. Often hiring Ph.ds.

I am wondering if any German residents could tell me more about these enterprises. First of all what is the main goal of such setups? Is there a real belief that these enterprises will make money, or is it just a hedge, in case they could be profitable? Do these kind of enterprises get funding? And if they get funding is it from industry or some government grant? Have you worked for such an enterprise as a founder or employee? Do you recommend it?