While Berlin is a very popular location for start-ups–most have headquarters in the capital–Frankfurt is beginning to catch up.
Fintechs are a booming sector of the start-up industry and is growing steadily. Last year, 171 new businesses were founded, according to the 2017 Fintech Hub Ranking by Comdirect. Unlike the established banking industry, however, Frankfurt am Main is not the “capital” of these new financial firms. According to Comdirect, the most popular location for founders is Berlin: currently, 228 of the 699 fintechs nationwide have their headquarters in the federal capital. Frankfurt follows in second place, with Munich close behind. According to the study, 84 fintechs are headquartered in Frankfurt and Munich, with 67 in Hamburg.
This is a dramatic increase for Frankfurt where last year there were only 58 fintechs based in the Hessian metropolis.
The major German cities differ not only according to the number of start-ups they have, but also in terms of the business models and sectors being pursued. In Berlin, every third start-up is in the real estate industry (so-called proptech), In Frankfurt, there is a tendency towards the area of investment, while in Hamburg it is financing.
When it comes to the allocation of venture capital, Frankfurt falls back significantly: the resident fintechs have raised just 25 million euros. By contrast, the 67 companies based in Hamburg alone have raised 213 million euros.
“The fact that the Hamburg fintechs receive so much money for their ideas is not surprising,”
comments Arno Walter, CEO of Comdirect.
“Some of the biggest fintechs in the world are sitting in the Hanseatic city.”
In Berlin, by contrast, 664 million euros of venture capital was allocated to financial technology start-ups last year.