Investments in German finance technology start-ups are declining. In other countries, mega-deals inspire the industry.
The account providers Kontist and Penta were pleased with strong financial injections, the credit brokerage Smava collected a whopping 54 million euros and the smartphone bank N26 even reached unicorn status: Many German fintechs were able to attract fresh venture capital last year. A total of 57 deals with a total volume of one billion dollars counted the consulting firm KPMG.
However, the market observers do not see any cause for cheering. In their latest report, “The Pulse of Fintech 2018,” advice indicates that cash flow has stalled compared to the previous year: In 2017, 88 deals were still counted – together, 1.7 billion dollars were given to German start-ups.
“In this country, investors seem to fear a degree of saturation in the fintech sector, especially in the payment area,” commented KPMG partner Sven Korschinowski. The donors have become pickier – and focused on start-ups with particularly high sales potential.
“I assume that the fintech scene will continue to consolidate this year because the successful players clearly set themselves apart from the competition,” said the expert.
Worldwide investment doubled
Meanwhile, global finite-chip investment more than doubled year-on-year in 2017 to $ 111.8 billion. The drivers were several “mega-deals”, according to KPMG. The advice is very generous at its start-up definition.
Thus, a $ 17 billion acquisition was included, which took place between established companies: Blackstone was in early 2018 majority owner of the financial market data division of the media group Thomas Reuters. Since then, the division has been trading as a refinance.
The second largest deal was a financing round of Ant Financial: The subsidiary of the Chinese e-commerce giant Alibaba had raised $ 14 billion in June. $ 12.8 billion flowed from the completed in January 2018 acquisition of the payment processor Worldpay by the rival Vantiv.
In addition, according to KPMG in Europe, most of the money went to the payment service provider Nets (5.5 billion), ETF Securities (3.5 billion) and the mobile payment provider iZettle (2.2 billion).
Attractive for venture capitalists: Fintechs is increasingly succeeding in positioning itself as a partner of established companies.
Up to 500 new cooperations per year counted the consulting company PwC last. According to market observers, this is crucial for establishing oneself in the market.
Also published on Medium.