Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/305543 
Year of Publication: 
2024
Series/Report no.: 
CESifo Working Paper No. 11301
Publisher: 
CESifo GmbH, Munich
Abstract: 
Fintech startups have set out to revolutionize the financial world. However, little is known about how successful and innovative these firms actually are. This paper investigates firm failure, funding success, and innovation capacity using a hand-collected dataset of 892 German fintechs founded between 2000 and 2021. We find that founders with a business degree and entrepreneurial experience have a better chance of obtaining funding, while founder teams with science, technology, engineering, or mathematics backgrounds file more patents. Early third-party endorsements and foreign partnerships substantially increase firm survival. We also establish the following stylized facts: (1) fintechs focusing on business-to-business models and which position themselves as technical providers prove to be more effective; and (2) fintechs competing in segments traditionally reserved for banks are generally less successful and less innovative. These results have important implications for the early-stage success management of fintech firms and the investment decisions of venture capital funds and government startup programs.
Subjects: 
Fintech industry
firm funding
firm failure
innovation capacity
JEL: 
G24
M13
Document Type: 
Working Paper
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