German start-ups that want to make investments or insurance easier and more convenient for consumers have received record amounts of money from investors.
Young finance firms raised 1.7 billion euros in 2019, figures from analysis firm barkow consulting show. This is an increase of 44 percent compared to the previous year. Insurance startups alone accounted for around 442 million euros, three times as much as in the previous year.
"The digital offering of insurance solutions is growing," said founder peter barkow. Start-ups for insurance booming. In 2019, the digital car insurer friday, which prices policies according to the number of kilometers driven, and the insurance start-up wefox, which offers, for example, the conclusion of household and liability insurance policies via app in a matter of minutes, received sums in the triple-digit millions.
Pwc also sees plenty of impetus for financial start-ups. Germany’s banks had invested more aggressively than ever before in such "fintechs," according to a new study by the consulting firm. From january to july 2019, she observed 36 direct bank investments in young financial firms – almost as many as in the entire previous year. Local insurers were also active: by july they had taken direct stakes in 20 young financial firms. In addition, insurance companies were also investing outside their own sector – for example in start-ups for drones, artificial intelligence and mobility.
For start-ups, injections of money from investors are vital, as they usually don’t make a profit in the beginning. Anglo-saxon funds in particular are investing venture capital in start-ups in the hope that their business ideas will catch on and bring them lavish profits. In 2018, german financial startups had raised more than one billion euros (1.17 billion) in venture capital for the first time. Financial start-ups offer services such as smartphone banking, digital asset management and interest rate comparisons for daily allowances. With their innovations, they partly compete with banks, partly cooperate with them.