Despite a decline in funding, Germany’s fintech sector demonstrated resilience and innovation in 2024, driven by advancements in artificial intelligence (AI), embedded finance, and strategic industry partnerships, according to a new report by Contextual Solutions, a Berlin-based strategy, expansion and product consultancy.

Fintech partnerships surge in Germany

In 2024, partnerships between banks and fintech startups flourished, focusing on embedded finance, cryptocurrency, and credit services.

Banking giant Deutsche Bank played a pivotal role in this trend, announcing a flurry of collaborations. In August, the bank teamed up with Upvest to provide the Berlin-headquartered fintech startup with access to its banking infrastructure. The new partnership will enable Upvest to deliver virtual IBANs, end-user cash management solutions, automated payment processing, and foreign exchange services through Deutsche Bank.

Founded in 2017, Upvest provides custody, trading, and settlement infrastructure, enabling financial services firms to offer diverse investment products.

In June, Deutsche Bank expanded its existing partnership with Bitpanda, providing the Austrian cryptocurrency unicorn with access to German IBANs, and streamlining the experience for users.

Bitpanda is a regulated multi-asset broker platform offering more than 2,800 selected virtual assets and indices as well as stocks, exchange-traded funds (ETFs) and commodities to retail investors.

The startup has significantly expanded its foothold in the German market, inking last year a collaboration with Landesbank Baden-Wurttemberg (LBBW), the largest federal bank in Germany, to integrate its “Investment-as-a-Service” (IaaS) infrastructure and provide corporate clients with crypto custody and procurement services. LBBW counts among its customers the likes of SAP and Siemens.

Commerzbank is another German bank that announced significant partnerships in 2024, unveiling in June a collaboration with Berlin-based credit card platform Pliant to enhance its business credit card offerings. This partnership aims to enable business customers to manage their card portfolios more efficiently, issue new cards, and set usage restrictions with greater ease.

More recently, Swiss bank Hypothekarbank Lenzburg acquired a 9.9% minority stake in Sutor Bank, a Hamburg-based private bank. Both banks are actively involved in the banking-as-a-service (BaaS) world and said in January 2025 that they will be growing their BaaS offerings through this collaboration.

Hypothekarbank Lenzburg is a well-known player in its local BaaS market, having inked partnerships with retail giant Coop and challenger bank Neon. Meanwhile, Sutor Bank, though not as widely recognized, has partnered with multiple fintech companies over the past years, including Raisin, Fintiba, and Timefonds.

Embedded finance on the rise in Germany

These new partnerships are being driven by the rise of embedded finance. In Germany, alternative payments are gaining traction, with 26% of consumers using buy now, pay later (BNPL) arrangements in 2023, according to a 2024 Adyen study.

In business-to-business (B2B), embedded lending is also growing, particularly among small and medium-sized enterprises (SMEs) that face difficulties securing traditional financing. Fintech companies like Banxware are addressing these issues by providing loans to SMEs through platforms like Lieferando, Germany’s largest food delivery service.

One standout performer in Germany’s embedded finance sector is corporate credit card specialist Pliant, which has achieved one of the strongest growths in recent years. According to the Sifted 50: Germany Leaderboard, Pliant recorded a 133.5% two-year compound annual growth rate (CAGR).

The figure ranks Pliant third in the German fintech landscape in terms of two-year revenue CAGR, behind Finanzguru (168.67%) and Circula (140.48%). Finanzguru is an open banking-enabled AI-powered financial advisor that claims more than 1.5 million registered users, while Circula is an expense management solution for SMEs that serves more than 2,000 customers.

AI as a key fintech theme in Germany

AI was another key theme in fintech throughout 2024, with significant developments shaping the industry.

In November 2024, Deutsche Bank’s corporate venture capital (CVC) group invested in German AI company Aleph Alpha, which researches, develops and implements transformative AI such as large AI language and multimodal models.

Deutsche Bank is also participating in a pilot project by Creance.ai, a joint venture between PwC Germany and Aleph Alpha, which aims to explore how innovative generative AI (genAI) can help manage complex compliance requirements more efficiently.

In January 2025, Frankfurt-based private bank B. Metzler seel. Sohn & Co. AG (Metzler) announced a partnership with Unique, a Swiss award-winning company specializing in AI-driven solutions for financial services. This partnership allows Metzler to integrate Unique’s AI solutions into their operations, enhancing their decision-making processes, client engagement, and overall operational efficiency.

The newly launched platform MetzlerGPT utilizes advanced large language models and other AI technologies to provide comprehensive data-driven insights to all 800 Metzler employees, streamline client work, and automate routine tasks.

That same month, Tapline, a German AI credit fintech platform, secured EUR 20 million in a pre-Series A funding round to accelerate its growth. Tapline’s platform leverage AI-driven credit technology to offer flexible funding solutions to businesses, serving clients in Germany, Estonia, the Czech Republic, and Poland, with further expansion plans on the horizon.

Most recently, German bank Sparkasse Suedwestpfalz deployed KeBob, an AI-powered security and fraud prevention system developed by KEBA. KeBob enhances security in bank foyers, detecting potential threats like vandalism, ATM attacks, unauthorized behavior, and medical emergencies while also preventing PIN theft and regulating after-hours access.

Fintech funding continues downward trend in Germany

Growth and innovation in the German fintech sector last year persisted despite a continued decline in fintech funding. According to CB Insights, fintech funding in Germany totaled EUR 620 million across 69 transactions in 2024, marking the lowest level since at least 2020.

The sum represents a 11% year-over-year (YoY) decline from EUR 700 million in 2023, while the number of transactions fell by 22.5% YoY from 89 transactions.

The YoY decline was driven by a scarcity of large funding rounds. In 2024, Germany’s largest fintech venture capital (VC) rounds included Upvest’s US$105 million Series C, Solaris’ US$104 million Series F, and Element’s US$54 million Series C.

Featured image credit: edited from freepik