fintogether wants to help fintechs in the early stages. The aim is to make Baden-Württemberg more attractive for start-ups overall, but the competition is fierce.
Berlin, Frankfurt, Hamburg and Munich - these are the major fintech cities in Germany. If Stuttgart Financial, the financial centre 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 up their own community together with the SMEs based in the state and the financial centre of Stuttgart. If everything goes well, Baden-Württemberg, or at least Stuttgart, could become one of the central locations for fintechs in Germany. And grown fintechs would no longer leave the region. But other German cities and regions are already much further ahead with start-up funding.
Baden-Württemberg has enormous potential for start-ups and especially for fintechs, we just have to use itKati 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). The study states that Berlin is dominant in all criteria. Stuttgart is only in seventh place. According to the study, there were just 2 VC rounds for fintechs in the period from 2019 to 2020. 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 money 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 start-up accelerator, organized the workshops and are looking for suitable start-ups. "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 a chance 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 start-ups 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 adds, and Stuttgart is also an important financial centre.
Especially in the early phase, regional eco-systems are decisivePhilipp Veit, fintogether
Applications still possible until September 20
According to the two, the fact that Baden-Württemberg has not yet developed such a lively and large start-up community, not even in the fintech sector, is primarily due to the start-up conditions. "Many medium-sized companies here want to work with start-ups, 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. "We also have regional companies getting involved and offering 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 to begin. Over a period of three months, there will be more than 30 free workshops for them. In these, founders will be explained, among other things, how to draw up a business plan or how to win customers for themselves. "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 start-ups", as they call it. "Basically, any start-up that wants to develop an interesting product for the finance and insurance industry is eligible," says Veit.
They want to start the first round with five start-ups. 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.
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