The coronavirus crisis is causing a slump in fintech investments. In the first quarter of 2020, equity investments plummeted to their lowest level in two and a half years.
Figures from the management consultancy According to Barkow Consulting, only €171 million in equity investments flowed into German fintechs in the first quarter of 2020. Limehome completed the largest financing round in the first quarter of this year. The Munich startup received 21 million euros from Lakestar, Holtzbrinck Ventures and Picus Capital.
German fintechs received 58 percent less money for shares than in the previous quarter. The drop in fintech investments is particularly severe compared to the first quarter of the previous year: At €695 million, the first three months of 2019 saw more than four times as much money flowing in compared to this year.
Weakest first quarter for fintech investments in five years
German fintechs last received even less equity capital in the fourth quarter of 2017. The last time the first quarter of a year was this weak was in 2015.
The figures do not bode well for the rest of the investment activity this year. While the COVID-19 outbreak already had a strong impact on China in January and has likely been dampening global investment activity since the beginning of the year, the full impact did not reach Europe until March, at the end of the first quarter. It remains to be seen whether financing activities will collapse completely in the second quarter or whether venture capital investors have already adapted to the changed situation.
