What are some quantitative finance startups

PwC: More and more fintechs are giving up

Most of the disappeared FinTechs had their headquarters where a particularly large number of them were recently founded - i.e. in the startup capital Berlin (74). Behind them, according to PwC, are Munich (25), Hamburg (21) and Frankfurt (20). 48 percent of the failed FinTechs turned their products and services directly to the end consumer. Almost equally, 44 percent pursued a B2B business model, but according to the study, eight percent could not clearly assign them to one of the two categories.

 

What is striking is the fact that 70 of the failed FinTechs are active in the area of ​​"financing". 53 were so-called proptechs (i.e. financial startups related to the real estate industry). This is followed by payment companies (29) and finally the insurtechs (22). Another noticeable feature: a venture capital firm had demonstrably invested in just eleven percent. "When banks or insurers examine a potential partner, there are naturally a lot of criteria to consider," says Sascha Demgensky. "One of them should be in any case: Who has invested in FinTech - professionals, or family and friends? In addition, there can be an indication of a promising cooperation if a startup has been around for more than five years and thus proves its sustainability has asked ", commentedSascha Demgensky, Head of FinTech at PwC in Germany.

 

According to the PwC expert, this development is "a completely normal process". "However, so far there has been no quantitative indication of how far the failure of startups in the financial sector has already progressed. In this respect, our survey helps to better classify the development in the future," explains Demgensky. It is true that "no general predictions can be derived from the numbers as to which FinTechs will fail and which will not". The increase since 2017 indicates, for example, that among the failed companies there are many me-too FinTechs, "who wanted to jump on the bandwagon sometime in 2013 or 2014 - and then had to find out that there are already competitors in their segment, who were simply earlier ".