Event Recap: Politics meet Startups
The exclusive networking event for FinTechs
For the majority of German citizens, the politics of Berlin are distant enough to not think about twice in daily life. The evening news report on cabinet meetings and votes in the parliament, which are often ignored. Federal politics are far from people-oriented. A bureaucratic jungle that hardly reflects the troubles of the common man.
Well that’s not always the case, shown by the State Secretary at the Federal Ministry of Finance Dr. Jörg Kukies attendance at the event series FinTech meets Politics. Organized by Schwarzwild Kommunikation, dfv EURO FINANCE Group and FinTech Headquarter, the event format brings together politicians and startups in a close and easy-going atmosphere. Participants were the Frankfurt startups Blockchain HELIX, Fincite, Traxpay and United Signals.
We need disruptive solutions to be able to modernize existing revenue models
The event, in form of a breakfast, began with Kukies’ introduction to the currently promoted projects and initiatives by the Federal Ministry of Finance. One of them is to support the creation of a clear legal basis for innovative technologies, such as blockchain technology. “We need disruptive solutions”, says Jörg Kukies, “so that we are able to modernize existing revenue models.”
As part of the recently published Blockchain strategy by the Federal government, the Ministry of Finance drives forward the implementation of a sustainable regulation of the Blockchain industry. Since the turn of the year, all service providers of digital assets (including cryptocurrencies) have to apply for a license at the Federal Financial Supervisory Authority. This regulation is expected to augment the sense of security in the industry by diminishing money laundering and other illegal activities with cryptocurrencies.
Oliver Naegele, Founder and CEO of Blockchain HELIX, was pleased to hear that. Experience in the industry has led to many promising use-cases being worked on. However, he cites that the lack of regulation creates a lot of uncertainty. This impedes institutional investors to enter the space, which is detrimental for young companies who want to scale up.
The “future fund” of the Federal government: 10 billion for high-growth, German startups
The next subject also discussed capital, to be exact: venture capital for German startups. The Federal Ministry of Finance pursues the plan to strengthen the startup ecosystem in Germany and make it more attractive for German investors. Startups are not only dependent on venture capital in the early stages of product and solution development, but also in later stages when scaling their business model.
On this, a comment by one of the participants was met with general acceptance: There is a striking discrepancy between early stage and late stage investments for startups. Higher volume late stage investments are way more difficult to attract. An additional reason for the future fund is to help export the German quality brand “Made in Germany” on an international level.
All in all it can turn out to be quite hard for startups to convince institutional investors in Germany. Foreign investors are often more open to invest in risky but disruptive startups. That’s why a state investment fund amounting to ten billion euros is going to be introduced: German startups, which have promising prospect of success, should not depend on foreign investors. Especially later stage financing with higher volumes of investments is essential for companies. This measure by the Federal Government is supposed to strengthen the German startups ecosystem and thus guarantee the economy to stay sustainable in the long run.
