The new Fintech era: How Germany's former VC darlings are growing up – and what really matters now
Just a few years ago, the German fintech sector was considered the absolute darling of VCs. Between 2016 and 2021, investments increased tenfold, according to a report by the Federal Ministry of Finance .
The hype was driven by technological breakthroughs such as open banking, growing user acceptance and the general pressure to digitize.
During the COVID-19 years of 2020 and 2021, digital financial solutions were in greater demand than ever. Valuations skyrocketed, and unicorns like N26, Klarna, and Trade Republic gained millions of users.
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Yes – at least in its wild, limitless phase. Since 2022, the boom has noticeably flattened. Rising interest rates, an end to the "growth at any price" narrative, and global uncertainty have cooled the general investment climate . Fintech financing volumes are also significantly below the levels of the pandemic years.
According to the latest KPMG Pulse of Fintech Report, German fintech investments shrank by ten percent year-on-year in 2024.
The industry is maturing. The growth euphoria is over, and the sector now has to assert itself in the real world of business. To survive, you need more than just user numbers.
André Bajorat knows what really matters today. As one of the most influential minds in the German fintech scene, with over 25 years of experience and the former CEO of the financial startup Figo, he has significantly shaped the digital financial world. He is also the founder of the fintech portal "Payment and Banking" and is considered an expert in the field.
But what does the current environment specifically mean for the future of fintechs like N26, Trade Republic, and others? What challenges and opportunities does the new era bring? We spoke with Bajorat about this.
Today, resilient business models, regulatory due diligence and partnerships with established players are important.
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