A number of hotspots
Although Germany’s banking sector was historically based in Frankfurt, the lively urban backdrop and start-up-friendly infrastructure of Berlin has put the German capital firmly on the map. In 2020, Berlin fintech start-ups received EUR 342 million in financing, or 64 percent of the total invested in the German sector. And the dynamism doesn’t stop there. Bavaria came in second with EUR 123 million in investment, about 24 percent of the total. As Munich is Germany’s traditional insurance hub, Zelros chose the Bavarian capital over Berlin for its expansion.
Zelros benefited from a program devised by the German Ministry for Economic Affairs and Energy to create regional concentrations of fintech/insurtech start-ups through a network of four digital hubs that bundle expertise. Berlin and Frankfurt, together with nearby Darmstadt, are fintech hubs, while insurtech is focused in Munich and Cologne. The hubs are part of the Digital Hub Initiative, a network of 12 hubs in digital fields ranging from mobility to digital health to artificial intelligence.
The hubs capitalize on Germany’s unique decentralized economy. In many European countries, expertise and industries are focused on large urban centers, but Germany’s industrial landscape is spread around the country – an added advantage perhaps for companies looking for the ideal location in Europe’s biggest economy.