The financial city of Frankfurt is known for banks and stock exchanges, and founders have rarely been attracted to the Main. That’s what politics and business want to change. But the competition with other German cities is tough.
Young financial companies vs traditional ones
The banking city of Frankfurt, despite all efforts to attract more young financial companies, can not keep pace with the competition. Munich 2018 has overtaken Frankfurt in terms of the number of resident financial startups, ie Fintechs, according to a study by the Bank Comdirect, which is the German press agency. According to this, 95 fintechs have settled on the Main, a little less than in the Bavarian state capital (100). One year ago, Frankfurt and Munich were still on the same level. Berlin remains unchallenged with 249 financial startups. The numbers provide headwind for the policy initiatives for more founders on the Main.
“Frankfurt remains behind as a fintech location behind its own claims”
“Frankfurt remains behind as a fintech location behind its own claims” said Comdirect CEO Arno Walter. Munich on the other hand convince with a balanced mix of founders and investors. Thus, in the years 2017 and 2018, 22 fintechs were founded in Munich, in Frankfurt only 17. And while financial startups on the Isar in the period gathered 174 million euros of venture capital of investors, founders on the Main only one-fifth of them ( 36 million). This places Frankfurt in fourth place behind venture capital, behind Munich, Hamburg (236) and the founder Mecca Berlin (854).
Deutsche Bank, Deutsche Börse and Commerzbank promote Fintechs
Fintechs have initiated innovations in the financial industry in recent years. They offer consumers some new digital payment methods and help with saving and investing with online asset managers or benchmark portals. Several banks are cooperating with start-ups to better meet their needs in times of digitization.
Frankfurt is trying to become more attractive to fintechs with numerous initiatives, referring to the convenient location, the strong financial center and the local Internet node. Deutsche Börse also offers growth companies the opportunity to go public in their own Scale segment. Deutsche Bank, in turn, has founded a digital factory that involves creative people, and Commerzbank is investing in startups with the Main Incubator.
Only in February had the Hessian state government launched an alliance of politics, science and industry in order to make Frankfurt within five years an international leading region for startups. By 2022, therefore, in the financial city and surrounding area, 1,000 growth companies are expected to sit, half of them fintechs – an ambitious target. These are to flow up to 20 million euros.
Frankfurt has discovered the startup scene relatively late and achieved a lot in a short time, said the consultant Peter Barkow, on whose data the study is based. In terms of international networking, for example, much has happened to the Gründerzentrum Techquartier. In Munich, however, there is a larger and grown scene to investors and the advantage of two leading international insurance companies. “Frankfurt is growing in terms of startups, only Munich is growing faster”.
Also published on Medium.