London startups will thrive after Brexit

Will Berlin become the capital for fintechs in Europe?

01.03.2017Positioning magazine

Brexit threatens London's role as a financial center. The start-ups in the industry in particular are looking for an environment in which they can thrive. Does Berlin offer suitable conditions?

Christopher Graetz

Founder and director of the Berlin online credit marketplace Kapilendo

Berlin is hip and trendy. Germany's capital continues to attract creative talent from all over the world. The rents are affordable and the quality of life is high. The location advantages of Berlin for founders are clear, and not just since the British decided in favor of Brexit. Berlin outstripped London as the capital of start-ups in 2015. According to EY Research, 2.15 billion euros of investor money flowed here, while only 1.77 billion euros arrived in the British capital. Berlin has now established itself as the Silicon Valley of the Old World with an excellent infrastructure for founders. The accolade: The most important start-up fair in the world "TechCrunch Disrupt" has waved goodbye to London and is coming - where is it going? - to Berlin.
After the London referendum, Berlin is becoming even more important as a European hub, especially for the fintech industry. The city offers unhindered access to customers in the European Union, international technology talent and donors. In Berlin, the topic of finance is also thought free from the legacy of the previous industry giants and existing structures - different and new, from the perspective of a young generation of online-savvy customers and, above all, without the shadow of heavy banking towers in the neck.
Whether founders settle in Berlin, Frankfurt or Hamburg is of secondary importance. It is much more important that they even do it in Germany and that we are expanding our position as a leading country in the fields of finance and technology. Preferably in a successfully united Europe.

Founder and board member of the digital Frankfurt asset manager Vaamo

With Brexit, London will lose its status as Europe's fintech hub. This is due to various factors. Direct access to the European internal market is lost and the search for suitable employees becomes much more difficult. But I don't believe that Berlin can take on the role of London.
Rather, Germany has a few aces up its sleeve to inherit London in a post-Brexit world. As the largest economy in Europe, Germany itself offers growth potential. In addition, Germany is already well ahead in the fintech sector with more than 500 financial start-ups. In addition, there are demanding, but fintech-friendly supervisory authorities. This is already working: in the third quarter of 2016, significantly more investment capital flowed to Germany than to Great Britain for the second time in a row.
On the European continent, once again, Frankfurt is clearly the leading financial center. On the Main, fintechs will find everything they had in London: good international connections, numerous contact options with supervisory authorities and financial institutions, as well as a vibrant, strongly networked and growing fintech community and the financial center's great commitment to the industry. In terms of workforce, the Rhine-Main area is at the forefront anyway. There are numerous renowned universities and many students in the area. In 2016, the first fintech course was even launched in Frankfurt. Fintechs will definitely not have any problems in the search for talent either. All of this means: Frankfurt and not Berlin will replace London as Europe's fintech capital.