New fintech accelerator launches in Stuttgart

fintogether wants to help fintechs in the early stages. The aim is to make Baden-Württemberg more attractive for startups overall, but the competition is fierce.

Berlin, Frankfurt, Hamburg and Munich - these are the major fintech cities in Germany. If Stuttgart Financial, the financial center initiative of Baden-Württemberg, has its way, the Swabian capital should also join this ranking in the future.

To this end, those responsible have now launched fintogether, a "central open innovation hub," as they call their project. This also includes an accelerator for early-stage fintechs. The plans are big: First, they want to make it easier for young companies to get started, then they want to build their own community together with the SMEs based in the state and the financial center of Stuttgart. If everything goes well, Baden-Württemberg, or at least Stuttgart, could become one of the central locations for fintechs in Germany. And established fintechs would no longer leave the region. But other German cities and regions are already much further ahead with startup funding.

Baden-Württemberg has enormous potential for startups and especially for fintechs, we just have to use it

Kati Nayeri, fintogether

According to the Fintech Hub Ranking 2020 of the direct bank Comdirect, Berlin is the measure of all things. The German capital ranks first in all four categories (number of startups, number of startups, amount of investments and number of VC rounds). Berlin is dominant in all criteria, the study says. Stuttgart is only in seventh place. Just 2 VC rounds for fintechs took place in the period from 2019 to 2020, according to the study. In Berlin, there were 106 in the same period. And even if you only compare Stuttgart with third-placed Hamburg, the balance so far is sobering. 139 million euros in VC funds went to fintechs in the Hanseatic city, compared to two in Stuttgart.

Kati Nayeri and Philipp Veit nevertheless believe in the success of the project. They both manage the startup accelerator, organized the workshops and are looking for suitable startups. "Especially in the early stages, regional eco-systems are crucial," says Veit. Of course, they will hardly be able to convince a young Berlin fintech to come to Stuttgart permanently, but the core goal is to offer founders from their own region an opportunity anyway. Those responsible are also aware that Stuttgart is unlikely to become the city with the most fintechs in Germany. Rather, the aim is to fill a few niches. Perhaps for young companies active in the field of cryptocurrencies.

"Baden-Württemberg has enormous potential for startups and especially for fintechs, we just have to use it," says Nayeri. From medium-sized businesses to global market leaders, companies are very present in the state, he said, and Stuttgart is also an important financial center.

Regional eco-systems are crucial, especially in the early phase

Philipp Veit, fintogether

Applications still possible until September 20

According to the two, the fact that Baden-Württemberg has nevertheless not yet developed such a lively and large startup community, not even in the fintech sector, is primarily due to the startup conditions. "Many SMEs here want to work with startups, but they don't know exactly how," says Nayeri. The two see their accelerator and the overarching fintogether initiative as a way to bring both sides together. "With us, regional companies also get involved and offer workshops for founders," says the Accelerator co-leader.

On October 1, the first batch, i.e. the first round with the first start-ups, is scheduled to begin. Over the course of three months, there will be more than 30 free workshops for them. Among other things, they will explain to founders how to draw up a business plan or how to win over customers. "At the end of the program, they should be able to convince a business angel or a VC of their idea," says Philipp Veit.

Founders can still apply for the first round of the Accelerator program until September 20. They want to include not only classic fintechs in the Accelerator, but "smart finance startups," as they call them. "Basically, any start-up that wants to develop an interesting product for the finance and insurance industry is eligible," says Veit.

They plan to start the first round with five startups. In addition to workshops, the accelerator offers a co-working space in Stuttgart, a mentoring program and access to its network. The project will initially receive financial support from the state for two years. "But our other partners, including the Stuttgart Stock Exchange, have already signaled to us that they want to build something long-term," says Nayeri.