More money has already flowed into the fintech industry than in the whole of last year. Why is so much being invested right now? And when does the high-altitude flight come to an end?
Ob this summer will set a new heat record is not yet certain. What is certain, however, is that it will be a record summer for German fintechs. As a reminder: These young companies want to use clever applications to make the financial sector smarter – for end users, i.e. customers, but also for the financial institutions themselves. They see enormous growth potential here in the sedate German banking sector. This attracts customers, but above all it also attracts money.
Four of these German financial start-ups alone have raised more than $ 1.5 billion in fresh capital within just under a month. The funding also shows how diverse the German fintech scene is now. Trade Republic got it started with a remarkably high financing round of 900 million dollars – the mega-deal made the Berlin-based neobroker the most valuable start-up in Germany with a valuation of 5.3 billion dollars. The online broker was able to win one of the world’s best-known venture capital investors, the American venture capitalist Sequoia, as a new financier. How did Trade Republic win over investors so? As a neobroker, all trading transactions can be carried out using a smartphone. This appeals to a younger, tech-savvy clientele – and it is precisely these customers who have been among the stock traders in large numbers during the corona pandemic, as the FAZ has already reported several times. A large number of customers and a clever business model are the recipe for success here. Because of its concept, Trade Republic is a classic competitor of banks and their direct brokers.