Frankfurt's Start-up Scene
Frankfurt is emerging as a vibrant European start-up ecosystem supported by its esteemed legacy and finance industries. The city boasts a highly diverse and active network of businesses that are boosted by the region’s exceptional research and education centres. Frankfurt is the finance capital of Europe, dubbed ‘Mainhattan’, the city is home to the European Central Bank, ECB Banking Supervision – SSM, the European Insurance Oversight, the German Stock Exchange (the 10th largest in the world), Bundesbank, the German financial oversight body Bafin, Deutsche Bank, Commerzbank and many more. The finance industry employs over 70,000 people and generates revenues higher than many countries worldwide. The city is also home to a multitude of large corporations such as Schott, Opel, Frankfurt Airport, Merck KGaA, Sanofi, and Deutsche Flugsicherung. This incredible wealth and knowledge within the city have laid the foundations for a thriving technology and start-up scene. Frankfurt’s corporate outfits offer significant benefits to start-ups in the region. Frankfurt has one of the highest concentrations of finance specialists and coders with experience in finance and tax in Europe offering much needed operational support to start-ups. Furthermore, many of Frankfurt’s large corporations have launched some incredible initiatives to position their business at the forefront of technology and start-up activity. Deutsche Bank launched its Digitalfabrik or digital factory, a project for programmers and finance experts to develop digital banking projects; Commerzbank’s initiative CommerzVentures is investing in “the most ambitious young” start-ups; and Deutsche Borse unveiled its Fintech Hub in 2016, an initiative aimed at supporting the fintech community in Frankfurt and in the Rhein/Main region. One of the newest programs to arrive in the city is the iconic Silicon Valley accelerator program Plug and Play, which launched a new European fintech program in collaboration with TechQuatier earlier this year. TechQuatier is an international community, incubator and co-working place comprised of over 100 start-ups and 30 academic partners and academic institutions. Corporate R&D spending totalled a whopping €5.5 billion in 2017. Naturally, Frankfurt is a hub for the FinTech industry with 55% of all local VC investments being acquired by fintech start-ups from 2012-2017. The acquisition of Fintech 360, a trading network for foreign currencies, was the largest start-up exit in German history coming in around €725 million. Interestingly, it was the Frankfurt Stock Exchange that acquired Fintech 360. However, Frankfurt has a lot more to offer than just fintech and finance. The city has a high concentration of AI, Big Data & Analytics start-ups with 8.5% of all start-ups in the region engaging in one of the three innovative activities. These start-ups acquired just over 13% of all local VC capital between 2012-2017. AI start-up Arago recently received €55 million in venture capital funding. These innovative start-ups are boosted by the fact that Frankfurt has the largest internet exchange point in the world, the DE-CIX. Furthermore, there is an abundance of large co-working spaces dotted around the city, twenty-two recognised spaces as of 2018. There is also numerous incubators and accelerators that offer vital support to start-up such as; Main Incubator, Pando Ventures, Unibator, Grundermaschine, Commerzbank Content Shift, Accelerator Frankfurt, E&Y Start-up Academy, Merck Accelerator and UX Accelerator. Lastly, Frankfurt’s high density of research and education institutes provide the talent needed to grow these start-ups into highly successful businesses. 25+ institutions educating over 230,000 students are present in the city and some are infamous for their innovation. Research intense institutions like the University of Mainz are where instruments for Mars Exploration Rovers Spirit and Opportunity were built. At this current time, Frankfurt pales in comparison to other European cities in terms of start-up activity. On the other hand, Frankfurt’s start-up activity is estimated to be growing 50% year on year and with the wealth and knowledge in the city, the future is bright.