These are the five largest fintechs in Germany

There are now more than 900 financial startups, or fintechs, in Germany that develop and market technology-driven financial innovations. Startbase took a look at the five largest of them.

In 2021, German fintechs raised more money than ever before for their inventiveness in the financial industry: they drummed up $2.2 billion from investors in the second quarter of the year. Although the figure is low by international standards, it already exceeds the rate of the past three years. Around a quarter of all German startup financing is thus in fintechs, and financial technology is growing. We present the five largest:

Trade Republic: 4.4 MILLION EURO.

The largest German fintech is currently Trade Republic, a digital credit institution from Berlin. Using their smartphones, customers have the option of trading listed securities and cryptocurrencies via the company's mobile app. The selection for the approximately one million customers is large: they can choose between more than 7,000 shares, 500 ETFs and 40,000 derivatives.

Unlike other brokers, Trade Republic does not charge a commission. However, the service is not completely free of charge. Investors pay a so-called third-party fee of one euro per trading transaction. Who buys thus a DAX share, pays just as much as someone, who buys collected ten shares. The payments are processed via Lang & Schwarz Aktiengesellschaft (LSX), among others.

Investors are flocking to the company, which was founded in Berlin in 2015 by three entrepreneurs, Christian Hecker, Thomas Pischke and Marco Cancellieri. All three are still with the company today. For their idea of commission-free online trading in shares, ETFs and derivatives, the company raised its first ten million euros from investors in July 2019. In April 2020, 62 million euros followed in another round of financing. Backers included Peter Thiel's Founders Fund and Creandum.

In the last financing round, the trio then collected 900 million US dollars. With a valuation of around 4.4 billion euros, Trade Republic is thus not only currently the most valuable fintech in Germany, but also the number one among all startups in the Federal Republic.

In the middle of the year, the fintech employed around 400 people. In the meantime, however, it also reaped some criticism. In early 2021, Trade Republic angered many customers when it restricted purchases of shares in video game retailer GameStop. Investors were at times unable to buy the shares, only able to sell them.

N26: 3.5 BILLION EUROS

N26 is a direct bank that specializes in account management and payment transactions via smartphone. It immodestly calls itself "The best bank in the world." Most recently, however, it had become known that more than 1600 accounts may have been hacked for criminal activities.

The aim of the company, which was founded in 2013, is to make payment transactions simple, convenient and particularly fast. This is called real-time banking. And it is also recognized by Bafin and the ECB: In July 2016, the startup received its full banking license.

Since then, N26 has been growing rapidly. Since 2019, the company has been one of the German unicorns - investors valued the direct bank at more than one billion euros. Currently, the company's valuation is 3.5 billion euros. And that despite red figures: In the most recent fiscal year, the direct bank still made a loss of 110 million euros with around seven million customers.

The number in the company name is due to the fintech's first address: "Unter den Linden 26." Like most of the German fintechs, N26 also originates from Berlin. The founders are Austrian Valentin Stalf and Maximilian Tayenthal. They raised more than 740 million euros from investors such as Chinese financial giant Tencent, Allianz X and members of the Zalando board.

The duo still has a lot planned for the future. The company is currently preparing another round of financing and is aiming for a valuation of eight to eleven billion US dollars. That would make it worth more than Commerzbank, which is valued at 8.3 billion U.S. dollars. But that is not all. Neobank also plans to go public in the next two years.

Wefox: EURO 2.5 MILLION

Wefox is a digital insurance platform that initially launched in the German and Swiss markets in 2015. The company now operates in three other countries. Wefox sees itself as a digital marketplace where policyholders, brokers and insurance providers can come together in an uncomplicated way.

On the one hand, brokers can offer their product range on the platform. The selection ranges from private pension plans to life insurance. Wefox earns money in the process by receiving a predetermined commission for each insurance policy taken out.

On the other hand, private customers can report damage and accidents or take out new insurance policies on the platform with just a few clicks. "Insurtech" is what it's called. The use and the offer to optimize one's existing insurances is free of charge. More than 600,000 policyholders use the app.

The business model attracts many investors. The first major backer was Abu Dhabi's billion-dollar sovereign wealth fund. Bank giants such as Goldman Sachs also convinced founders Julian Teicke and Dario Fazlic. In June 2021, in the company's last financing round, Wefox raised around €533 million from investors including Partners Group, Jupiter and Decisive Wealth. The company's valuation rose to around €2.5 billion. What's special: Wefox is one of the few fintechs that has been profitable for some time. Last year, its revenue was around 117 million euros.

The company is not only investing the money in its own expansion. This year, Wefox is getting into sports sponsorship: it recently secured the naming rights to the stadium of the Swiss club FC Schaffhausen.

Raisin DS: EURO 2.5 MILLION

Raisin DS was formed in June 2021 from a merger of interest rate portals Deposit Solutions (Zinspilot) and Raisin. The merged fintech currently has an enterprise valuation of €2.5 billion. Yet it only achieved unicorn status in July this year.

Three former McKinsey consultants founded Raisin nine years ago. They made the company known under the name WeltSparen. Together with N26, Raisin is one of the few German fintechs with its own full banking license.

The merger with Deposit Solutions is considered the largest merger in the German fintech industry to date. Deposit Solutions is one of the few fintechs to come from Hamburg and has become known under the Zinspilot brand. Together, Raisin DS forms a kind of digital marketplace for overnight money and time deposits in other European countries. Savers and corporate customers can invest their saved assets in accounts at Raisin's partner banks free of charge and without fees. They can choose from various savings products from all over Europe. ETF investments are now also offered under the WeltInvest brand.

Experts suspect a rapid upward start to the company's valuation as soon as Raisin DS launches a new round of financing. Both companies have established a large customer base and good market forecasts.

Mambu: 1.7 MILLION EURO.

As recently as January 2021, Berlin-based startup Mambu, a provider of cloud-enabled banking software, mutated into a unicorn. According to its own statements, the company provides banks with the necessary technology to "develop modern, first-class banking products."

In early 2021, Mambu raised €110 million from investors for the company's idea. The company's valuation skyrocketed to 1.7 billion euros, up from just about a tenth, about 180 million euros, two years earlier.

In the first year, founders Frederik Pfisterer and Eugene Danilkis initially focused on microfinance institutions in Latin America and Africa. The goal was to rid financial institutions of outdated and overly complex operating systems in order to better integrate people into the formal banking sector. Three billion people were to gain access for low-cost, digital financial products as a result.

The goal was to enable individuals and emerging businesses to seize economic opportunities through access to financial services. The company is now active in 50 countries and has more than 160 customers. Among them, N26 or other well-known banks such as OakNorth, ABN AMRO and Santander. Markets in Brazil, Japan and the US are the main focus.

The fintech currently employs more than 500 people. Within the next year, it aims to double that number. In 2019, it was still under 40.