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FinTech: The Opportunity for D-A-CH Startups & SMEs and Investors

FinTech: old wine in new bottle?

Far from it. A short form of “financial technologies”, we take it to mean two types of FinTech firms:

  • Innovative firms applying technologies like big data and analytics, mobile, cloud, social media and security that can help banks acquire customers, grow revenues, cut costs, improve time to market and meet compliance and regulatory requirements.

  • Disruptive firms that are disintermediating traditional banking value chains to take on traditional bank businesses. Payments, lending, investing and personal financial management are all in the line of fire.

As recent market developments indicate, banks, larger vendors, regulators and of course investors are active in the FinTech space and constantly looking for opportunities, threats and synergies.

FinTech Funding and M&A: Germany’s share only 0.6 %

An Oct. 2012 study of nearly 350 transactions in the FinTech space estimated nearly € 8.3 bn spent in funding and M&A of FinTech startups.

The bulk of the investments have been in the areas of payments, lending, capital markets (investment, trading, currency exchanges etc.), compliance and personal finance management.

While US (~60%) and UK (~30%) spent the most on funding and M&A of FinTech firms, Germany’s share of this spend was less than 0.6%.

Accelerating FinTech “Made in DACH”

A recent Bitkom study reveals the challenges in creating, financing and growing conservative German startups:

  •  Startups/SMEs financed mostly from own operations and equity of founders

  •  Bank loans (6%), VC (5%) and public loans/grants (3%) play virtually no role 

  •  60% of IT start-ups are still on the market after five years 

However, this also reveals the untapped opportunity for knowledgeable investors who can identify, mentor and fund talented startups to success.

We see this opportunity in the D-A-CH region – with its top global financial centres like Frankfurt and Zürich, a strong tradition of banking business and technical innovation – for FinTech startups & SMEs, and for investors looking for “hidden champions” in the FinTech space.

FinTech Forum DACH is on a mission to:

  • Identify FinTech innovators and disruptors early in their lifecycle, and get them visibility and connections among investors, prospects and mentors.

  •  Accelerate funding, incubation and growth with localized approaches 

  •  Encourage more FinTech founders in D-A-CH to bring their ideas to reality by creating awareness of the opportunities in the FinTech space 

Kicking off with our first event on 22nd November 2013, the Forum will become the hub for FinTech in the D-A-CH region – with regular newsletters and updates, guest posts, local meetups and speakers – so watch this space!