The Fintech Startup Monitor illustrates the importance of the industry with one figure: 20 percent of German fintechs employ more than 50 people. In the rest of the startup ecosystem, this figure is higher than the authors of the study According to only 5 percent. Fintechs are therefore on average significantly larger and have more employees than other startups.
German fintechs are concentrated in major cities: 38.2 percent of financial startups are located in Berlin, followed by Munich with 11.2 percent, Frankfurt with 10.8 percent, and Hamburg with 8.7 percent. More than two-thirds of all fintechs are based in these four cities. The situation is even more striking when it comes to the distribution of financing rounds: More than 72 percent of all startups that raised investment last year came from Berlin, Munich, Frankfurt, or Hamburg.
Fintech Startup Monitor shows strengths and areas where there is room to catch up
Fintechs have weathered the coronavirus crisis significantly better than other startups. While 62 percent of financial startups feel impacted by the crisis, this figure is 74 percent for all startups. Last year, fintechs increased their average annual revenue by 37 percent from €4.3 million to €5.9 million. Meanwhile, revenue for all startups fell by 27 percent, from €1.9 million to €1.4 million. For the coming year, fintechs expect an average revenue growth of a whopping 82 percent to €10.7 million.
However, with a female share of fintech founders of only 7 percent, there is at least some catching up to do in this area. Franziska Teubert, Managing Director of the Federal Association of German Startups, says:
"The successes we're seeing in the fintech ecosystem exemplify the potential startups have to further develop and renew our economy. They're driving digitalization forward—both in new markets and through innovations in existing business areas. At the same time, however, fintechs also face a number of challenges, particularly the empowerment of women: We need more female founders in the fintech sector!"
