How are Germany’s fintech companies doing?

Consumers want more technology powered solutions when it comes to managing their finances, and fintech companies are delivering.
1 August 2018

The N26 team in Germany. Source: Twitter / N26

When you think of Germany, it’s hard to gauge how the country’s fintech companies are performing in comparison to its complicated yet sophisticated banking structure – especially in terms of serving its tech-savvy residents.

However, there’s data that paints a strong and favorable growth story for fintech companies in Germany. Everywhere you look, fintech companies are either independently winning clients or are partnering with banking institutions to create exciting solutions and experiences.

Take N26 for example. A pure-bred fintech company, it’s a digital bank that provides customers with a lot of flexibility and choice. Since its launch in 2013, N26 has stuck to the European markets. However, it has plans to enter the UK and the US markets this year.

German fintech companies, as a result of their success, are attracting a lot of attention from investors from across the world.

N26 has raised a total of US$215 million from some of the world’s most well-known investors, including Allianz X, Tencent Holdings Limited, Li Ka-Shing’s Horizons Ventures, Valar Ventures, members of the Zalando Management Team, and Earlybird Venture Capital.

According to a recent Deutsche Bank research report, 4 percent of all German startups in 2017 were fintech businesses. In 207, the total number of fintech startups reached around 700. The average growth rate for these firms over the last 10 years is a staggering 33 percent.

Around 40 percent of the German fintech companies offer either B2B or B2C services, while some 20 percent offer both.

In fact, a significant number of B2B fintech companies partner with banks. In 2017, Deutsche Bank found that almost 90 percent of German banks reported that they were cooperating or planning to cooperate with fintech companies in order to improve or transform their offerings.

These co-operations are also a big reason why fintech companies in the country are soaring (in interest and valuation). Just last week, for example,, one of Germany’s leading consumer finance platforms was acquired for EUR285 million (US$333 million).

On a European level, some three-quarters of banks are cooperating with fintech companies, given the innovative solutions they bring.

For almost 60 percent, cooperation is seen as a tool to reach customers with innovative products ahead of the competition.

What do German consumers want?

Germans use digital financial services in large numbers. In 2017, three-quarters of internet users use online banking services, according to survey responses collected by the German bank. Thirty percent of them did not visit a bank branch at all.

According to statistics, online payment schemes offered by fintech companies – rather than banks – are the most popular way to pay for internet purchases.

When paying for internet purchases, it seems as though consumers have fundamentally changed their habits.

While German consumers paid only 5 percent of their transactions (by value) via online payment schemes in 2008, they now use them for 58 percent of their e-commerce bills. However, online payment schemes only account for a share of 4 percent in total consumer payments.

It’s interesting to note that Germany also has an active robo-advice landscape with some 40 robo-advisors in 2018. Up from some EUR650 million (US$760 million) in 2016, German robo-advisors currently manage around EUR1,700 million (US$1987 million).

The fact is, if you’re looking for a fintech success story in Europe, Germany won’t let you down.