We invest in a broad range of verticals. Companies need to be digital, innovative and scalable to fit our investment criteria. FinTech is one of the verticals we invest in. Through our partnership with Deutsche Bank we can provide startups in this field with extremely valuable shortcuts.
BERLIN - A FINTECH HUB AFTER BREXIT?
Berlin’s dynamic startup scene is increasingly challenging London for its number one spot in the European FinTech industry. Especially after the Brexit referendum earlier this year, there seems to be much more uncertainty around funding, regulations and access to the single European market for FinTech companies in the UK. This has led to more than 100 companies asking to relocate from London to Berlin. Furthermore, this trend is also reflected by the strong FinTech funding growth in Germany, especially Berlin, which has outpaced the UK in the first two quarters of 2016 (Source: EY - German Fintech Landscape, 2016).
While it might seem logical for many of these companies to relocate to the other European financial hubs, namely Paris or Frankfurt, there are multiple reasons why FinTech founders should consider Berlin as their starting point in Europe.
First of all, Berlin as a startup hub offers unique access to a vast pool of specialist labour and a big network of investors. At the same time the costs of doing business and the costs of living are comparatively low in Berlin (Commercial real estate in Berlin is about a fifth of the cost of office space in London and apartment rents are about 60% lower). Additionally, since 49% of all startup employees in Berlin are non-German the city's startup community is very international.
Second, Berlin has already attracted over 70 FinTech companies which makes it the biggest FinTech cluster in Germany (Source: EY - German Fintech Landscape, 2016). For startups this means that there is already a big network in place which will make it easier to enter into partnerships or create synergies.
BUT WHAT ABOUT FRANKFURT?
However, at one point or another industry access becomes more important for most startups. In the beginning it`s just a team of founders working day and night on building a MVP to generate first traction. Only at later stages questions revolving around topics such as legal framework, integrability with third party API's and strategic partnerships become more relevant. In FinTech, who could be better to discuss these questions with than established Banks? However, if founders want to talk to Banks in Germany they still need to go to Frankfurt.
THE BEST OF BOTH WORLD'S
Our attempt to solve this dilemma for FinTech founders and to further bridge the gap between Berlin and Frankfurt is our recent partnership with Deutsche Bank. This partnership will enable startups to collaborate with the Frankfurt’s established sector while benefiting from the advantages of Berlin. Starting with our Program11 the startups selected, will also get access to the banks Innovation Labs and its Digital Factory in Frankfurt. With the bank as a partner the startups get access to some of the banks extensive resources and industry experts. This can be valuable in understanding the market for FinTech solutions, in tailoring FinTech products to the needs of the customers or in understanding the requirements of startups who want to partner with big financial institutions.
In turn, Deutsche Bank’s advantages from the partnership are twofold. First, AS PnP is well connected to the early stage startup world and will be able to quickly identify companies with relevant technologies and ideas. As a result, Deutsche Bank will be able to support and push the development of the most relevant ideas. Second, AS PnP makes it easy for Deutsche Bank to understand the FinTechs that go through the accelerator program. This allows the bank to form mutually beneficial partnerships with the startups, as well as becoming one of their investors.
In summary, our partnership with Deutsche Bank is an additional factor which makes Berlin increasingly interesting to FinTech startups. Through the new partnership and our experience from over 3,5 years of accelerating startups we will be able to provide FinTech entrepreneurs with the resources and networks needed to take their companies to the next level.
ABOUT AXEL SPRINGER PLUG AND PLAY
Axel Springer Plug and Play is an early stage accelerator with the focus on digital, innovative and scalable B2B and B2C companies. Over the last years we have successfully accelerated 89 companies from a broad range of verticals, among them N26 one of the hottest European FinTechs right now. The startups in our 100 day program receive €25.000, co-working space and direct help from our mentors and experts. Our startups get access to the huge network of Axel Springer, which consists of around 300 majority shareholdings globally. Moreover we connect them to our partners Accenture, Deutsche Bank and ERGO Insurance who aim to actively collaborate with the founders. To make the startups a long-term member of our family, we take an equity stake of 5%. No matter whether founders are just starting up or whether they are already up and running and want to gain access to the German and European market, we are able to connect them to the right corporates and the right investors.
If you are willing to commit to 100 days of long nights, intensive meetings, and a lot of sweat in order to take your company to the next level check out a more detailed overview of the program here.
Application phase for Program11 (Start: 16 January 2017) is open until 20 November. Startups can apply here.