Fintech in Europe: Is Berlin the New London?

London is a bustling metropolis of commerce, thought of as a titan of industry and innovation—no matter what industry is under discussion.

However, recent economic concerns, most notably the effects of the Brexit on business sectors including fintech, have led some to suggest that the city is no longer the go-to spot for businesses to grow.

The challenger? Berlin.

German fintech entrepreneurs raised $108 million in fintech funding, according to the Pulse of Fintech Q3 2016 report produced by KPMG and CB Insights.

London’s status as an industry hub has held historically true for fintech, but Brexit concerns still seem to be foremost in the minds of investors; in the third quarter of 2016, U.K. companies raised a total of $78 million.

The total amount of fintech funding for the whole of Europe this quarter was $0.2 billion; the total amount of fintech funding across the globe amounted to $2.4 billion, with $1.2 billion of that number going to Asia—a factor buoyed by the rising interest in investment for companies based there, specifically China.

From the report:

China-based fintech companies have done especially well, with unicorn companies such as Ant Financial, JD Finance and Lufax continuing to grow and attract investment both domestically and globally…While China may be the central focus of fintech in Asia, it is the region’s diverse fintech hubs that are helping to make the region a fintech leader. Hong Kong, Singapore, Australia, India: each of these jurisdictions is finding a way to set their fintech offerings apart.

Investment in German companies is on pace to outstrip U.K. companies by the end of this year, according to the report; and the three largest European rounds for fintech were all held in Germany. These deals include the $40 million round raised by German digital bank N26.

German fintech funding continues to grow as 2016 draws to a close, with Berlin-based investment startup Cashboard just announcing the close of a $3 million round led by Luxembourg-based fund Digital Space Ventures.

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