German Fintech Failures Spiked in 2017

A total of 233 fintech companies went belly up in the last eight years in Germany, with no discernible difference in customer or business serving businesses that failed. Conversely, there has been a 100% increase in investment into the German fintech sector in the opening quarter of 2019 YoY

German Fintech Failures Spiked in 2017

175 fintech start-ups have gone bust in Germany since 2017, according to a report from PwC. A total of 233 fintech companies went belly up in the last eight years in Germany, with most of them being based in Berlin.

There was no discernible difference in customer or business serving businesses that failed, and the average age of the company was four years. Despite the rocky start a lot of companies are experiencing, there has been a 100% increase in investment into the German fintech sector in the opening quarter of 2019 as compared to the previous year’s start.

Head of Fintech at PwC in Germany, Sascha Demgensky, said it’s “a completely normal process, when young companies fail, even in booming industries”. The analysis suggests that the companies that did not succeed were likely to have been similar to other start-ups around the 2013/4 fintech boom but were not completely original.

Demonstrating the importance of institutional support in the incubation of fintech in Germany, only 11% of companies that went under had received support from venture capital banking.

Some notable German companies that are on the successful side of the market include N26 and wefox. In 2019 they have so far raised US$300million and US$120million, which is the tip of the iceberg for German fintech investment. The German market is second only to the UK which outperformed it’s rival by 4:1 in terms of fintech investment in 2018.