German startups are celebrating record funding levels. Fintech startups, on the other hand, only received a smaller slice of the pie last year.
Figures published a few weeks ago showed a Record investment in German startups Local companies secured €4.6 billion in venture capital, of which €802 million went to Bavaria.
However, despite all the euphoria, a new study by the consulting firm KPMG reveals a clear loser: Investments in German fintechs plummeted by 41 percent, and the number of deals by 35 percent. In 2017, investors paid $1.7 billion to German fintech companies in 88 financing rounds, but in 2018, that figure fell to just $1 billion in 57 deals. KPMG Partner Sven Korschinowski says;
"Investors in this country seem to fear a certain degree of saturation in the fintech sector, especially in the payments area. They are now much more selective and are focusing on startups with the highest revenue potential. I expect the fintech scene to continue to consolidate this year as successful players clearly differentiate themselves from the competition. The drivers are likely to be fintechs scaling their business models and traditional banks seeking to achieve their own strategic goals more quickly."
European fintech companies secure the lion's share
Meanwhile, global fintech investments more than doubled year-on-year to $111.8 billion. This was driven by several large deals and buyouts worth billions in the single- to double-digit billion range. Growth was particularly strong in Europe. Investments nearly tripled last year, from $12.2 billion to $34.2 billion. European fintechs thus secured more than 30 percent of the capital invested in the industry globally.
