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Munich is one of the top locations for FinTech and InsurTech start-ups in Germany
According to a current ranking by the German credit institute comdirect, the Bavarian regional capital is in 2nd place behind Berlin and ahead of Frankfurt in a comparison of German FinTech centres. In the study, German cities were analysed in relation to the number of start-ups based there, the investment volume and venture capital rounds by external investors. This reveals that Munich scores well above average in all the criteria analysed.
When the data is looked at more closely it becomes clear that an extremely large number of FinTech and InsurTech start-ups have set up in the regional capital. With 84 new companies, Munich is the second largest location in Germany in this segment. Munich is also among the top three as a financially strong investment centre for the industry with the volume of venture capital invested in FinTech start-ups. At 159 million euro, more money was provided in the regional capital than in Frankfurt, Düsseldorf, Cologne and Essen together during the period analysed, that is from the start of 2016 to autumn 2017.
Munich ranks in the top three with all the criteria analysed
Munich is even among the front runners in second place with the number of financing rounds with venture capital, an important indicator for the growth of young companies. 32 financing rounds were completed during the period analysed, almost as many as in Frankfurt and Hamburg together. The regional capital can be found among the top three spots with all the criteria analysed emphasising Munich’s importance as a broad-based hub for FinTech and InsurTech start-ups in Germany.
A range of start-ups of an international calibre has also established itself thanks to the outstanding environment. Only last year, the Munich FinTech start-up Scalable Capital, an app provider for semi-automated asset management, was able to collect VC investments amounting to more than EUR 41 million. This was the second highest investment volume acquired by a German start-up in this segment in 2017. Munich doesn’t just offer the best conditions for the financing of existing companies though, the number of start-ups in the city on the Isar is among the top positions in the ranking with 23 FinTech start-ups created.
Innovative global players from the FinTech and InsurTech sector were founded in the regional capital.
The reasons for the good scores in all the ranking’s criteria are obvious: besides the establishment of traditional banks and insurance companies, such as the Hypovereinsbank, Allianz or Munich RE, Munich also offers the perfect environment for the continuous development of young start-ups with regard to other relevant factors. For example, there is subsidised office space for promising newcomers to the digital industry in Munich. At Werk1, not far from Ostbahnhof train station, young companies have the option of renting well equipped office space cheaply and networking with other start-ups, experts and partners. The successful start-up, Scalable Capable, which is now valued at more than EUR 150 million, once started in the office space at Werk1.
The W1 Forward InsurTech Accelerator specifically tailored to InsurTech start-ups is also based at Werk1. Select young companies are provided with experienced mentors here, alongside free workspace, and come into contact with important decision-makers in the industry. The total funding value per start-up is EUR 50,000.
Targeted initiatives are just as important to Munich’s standing as a FinTech centre. The same applies to fostering close links to financially strong investors and local business as well as involving research and politics. This intelligent networking of all the stakeholders involved is rounded off by various events and conferences that provide additional stimulation for Munich as a hub for the digital financial sector.