- In 2015 1.2 billion euros were invested in German FinTech companies
- 250 FinTech companies employ about 13,000 people in Germany
- Germany is the second largest FinTech location in Europe – behind Great Britain and the fourth largest in the world
- Berlin and the Rhine-Main-Neckar Region are the leading locations in Germany
- Number of FinTechs in the Rhine-Main-Neckar Region grew in 2015 by 22 percent to 56
In the German FinTech sector the entrepreneurial spirit prevails: the number of young technology companies in the financial services sector, FinTechs, grew last year by 32, now totalling 250. The amount of Venture Capital funds invested in these Start-Ups has nearly tripled from ca. 200 million Euros in 2014 to 576 million Euros in 2015. In Europe, only the UK has the edge, with 707 million Euros being invested in FinTechs. The British FinTech scene now employs around 61,000 people whereas in Germany FinTechs employ about 13,000 people. Taking into account the acquisition of 360T by Deutsche Börse, the total investment in German FinTechs for 2015 is 1.2 billion euros.
Within Germany, two regions have distinguished themselves as FinTech hotspots: Berlin is currently home to 70 companies and the Rhein-Main-Neckar region is home to 56. The Rhein-Main-Neckar Region, however, has proven to be the most dynamic in the past year. The number of FinTech companies there rose by 22 percent compared to the nationwide growth of 13 percent.
These are the findings of a study commissioned Frankfurt Main Finance and conducted by the auditing and consulting firm EY. The study examines the German FinTech industry and identifies potential areas for advancement.
“The region is much broader and more dynamic than generally assumed,” says Jan-Erik Behrens, one of the study’s authors and executive director at EY. “There are a surprising number of FinTech companies quietly but effectively pursuing their work. Even though two-thirds of the companies studied come directly from Frankfurt, the appeal of the financial centre goes far beyond the city limits of Frankfurt and Eschborn. Compared to the rest of Germany the region is in second place, falling closely behind Berlin and significantly ahead of Munich,” said Behrens. “Above all, in the recent years the region has gained significant momentum.”
Compared internationally, Germany has rallied strongly in recent years, according to Christopher Schmitz, co-author and partner at EY. “The German FinTech industry is one of the challengers in the market. It is clear that Germany and particularly the region around Frankfurt will play an even greater role in the future if the planned Frankfurt FinTech Centre is realized.”
Support from Dialogue Forum FinTech Frankfurt Rhein-Main
“Dialogue Forum FinTech Frankfurt Rhein-Main, an initiative of Frankfurt Main Finance with support from EY, is comprised not only of some 50 public and private institutions but also numerous FinTech companies (list of members enclosed). They are united in the goal of establishing an attractive, successful, and sustainable FinTech ecosystem in the region and to see who can bring what to the table,” explains Dr. Lutz Raettig, spokesman for the Executive Committee of Frankfurt Main Finance. “The support and engagement we’ve seen is quite remarkable.”
Under the leadership of Tarek Al-Wazir, the Hessian Minister of Economics, Transport, Energy and Land Development and member of the board of Frankfurt Main Finance, the State of Hesse has initiated the establishment of an independent and inclusive FinTech Centre in Frankfurt. “As part of the digital initiative, we are working closely with the city, the region and local industry to create a centre for young FinTech companies. Our region has the best conditions for this, offering the necessary infrastructure, the university landscape, the proximity to the regulators, the ECB and the Bundesbank, and networking with industry. Moreover, Frankfurt has the international connections that are essential for a global FinTech industry. This initiative will permanently strengthen Hessen as a business location,” says Al-Wazir.
The venture is also actively supported by the City of Frankfurt. Peter Feldmann, Lord Mayor of Frankfurt, explains, “Our objective is to make Frankfurt the number one FinTech hub in continental Europe. Here, young entrepreneurs will discover the most international city in Europe with the highest economic potential. To this end, we cooperate extensively with the State of Hesse and the Finance Industry. Our optimal resources have been and are consistently confirmed in numerous city rankings.”
This support convinced WebID Solutions, Europe’s leading provider of high-security AML compliant verification and online contracting procedures. CEO Thomas Prince announced at Börsen-Zeitung’s Finanzplatztag (Financial Centre Day) that WebID wants to move their offices to the financial centre and, if possible into the new FinTech Centre. “We are planning a six-fold increase of our revenues in 2016 and our customers are here. In addition, the commitment of those involved with the FinTech initiative is quite unique. The financial centre offers us the broad international network needed for our planned expansion. We witnessed this first hand on delegation trips to India and Korea. We brought back very concrete business approaches that will secure additional growth potential.”
Deutsch Börse has emphasized its broad commitment to FinTech. Just last week, they presented their FinTech initiative in Frankfurt. Furthermore, Eric Leupold, Head of the Venture Network of Deutsche Börse, sees the financing situation for these growing companies significantly improving. “Deutsche Börse’s new Venture Network is in Frankfurt and ready to bring high-growth companies together with investors. We are committed in every way to the financial centre.”