In terms of funding, it almost never happened in 2018 for startups in Germany. More than 4.5 billion euros were raised by young companies in total. A not so rosy picture of the situation draws a new evaluation of the auditing firm KPMG – at least for Fintechs. Because in 2018 across all sectors, both the total number and the amount of startup deals went up in comparison to the previous year, both figures fell at the financial firms.
Converted around 890 million euros (just over a billion US dollars) were German fintechs in 2018 by investors. In the year before it was still about 1.5 billion euros. And this despite the fact that there were a number of substantial rounds of financing last year. For example, the Berlin startup bank N26 collected around 143 million euros, the Solarisbank 56.6 million euros, the company builder Finleap 41.5 million euros.
For 2018 KPMG counts 57 fintech deals in Germany. More than 80 were, according to the authors in the year before. A large item in the 2017 overall chart is likely to be Naspers’ 110 million investment in Kreditech. After a record high in 2017, the decline to “healthier” values is now observed, says the report. “We are starting to see startups able to raise large sums – beyond Series A and B. This is quite new for the German market, but very promising, “says KPMG partner Sven Korschinowski in the report. Nevertheless, there are fears among investors that the market could possibly be saturated.
Raisin picking among financiers
The authors observed in Europe a consolidation in many fintech areas – including in the payment. For example, Nets from Denmark and Concardis merged in mid-2018 to become a payment service provider. In Germany Fintech investors have now become picky, so the study makers. They focused more especially on the startups with the highest sales potential. The partnerships with established financial institutions and financial firms are described as beneficial for investments.
In Europe, the amount of fintech investments last year was the equivalent of around 30.3 billion euros. One of the largest rounds of financing: the British N26 competitor Revolut, which got the equivalent of around 220 million euros. Because KPMG also considered acquisitions (M & A) in the deals, the takeover of iZettle by Paypal announced in May (for almost two billion euros) is raising the number. Due to this extended deal definition, the total volume is well above the levels mentioned in the recent startup barometer of the EY audit.