Market developments of Austrian financial service market players in the year 2020
This is a short version of the article ”5 predictions for the Austrian financial services market and its CEE footprint in light of the global Covid-19 pandemic” and focus on market developments of the Austrian financial services market players in the year 2020
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2020 was a rollercoaster for all of us, but “Life is a rollercoaster, you just gotta ride it!” Therefore I would like to invite you to have a look into the crystal ball, as it is important to position for the post-covid period.
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The entire article “5 predictions for the Austrian financial services market and its CEE footprint in light of the global Covid-19 pandemic” is available here.
Background — Austrian financial services market
Historical ties and geographic proximity helped Austrian banks and insurance companies expand into Hungary and the former Czechoslovakia in the early 1990s. Their footprint has since broadened dramatically across the entire Central Eastern Europe (CEE).[1] Today Austrian players are present and have subsidiaries with substantial market shares in more than 25 countries.[2]
Austria’s economic landscape[3]
Strengths
- Strong macroeconomic fundamentals.
- Industrial and tertiary diversification; high added value.
- More than 30% of energy sourced from renewable supplies.
- Major tourist destination (11th in the world).
- High public expenditure on R&D (3% of GDP).
Challenges
- Dependent on German and Central/Eastern European economies.
- Banking sector exposed to Central, Eastern and South-Eastern European countries.
- Multiple layers of power and administration (federation, Länder, municipalities) compared to country size.
- Underdeveloped venture capital market.
Statistics countries where incumbent Austrian financial services market players are active.
Market developments in 2020
Especially at the beginning of the global Covid-19 pandemic in Europe back in Q1/2020, the uncertainty in all areas of business and society was tremendous. Nevertheless, the activities related to the Austrian financial services market remained high throughout the year.
New players, both established and challengers, continue to enter the Austrian financial services market. In addition, cooperation is becoming more and more relevant, while the market itself continues to remain highly competitive and challenging.
Below is a non-exhaustive summary of moves within the Austrian financial services
January
- UNIQA completed the acquisition of AXA’s retail and corporate insurance business in Poland, Czech and Slovakia for approx. € 1 billion.
February
- ready2order backed its international scale-up as a SME cloud-based point-of-sale service provider with a 5 million investment round.
- hihealth simplified the invoice management related to private insurances and announced another middle seven-digit seed round in order to fund its expansion strategy.
- Vienna Insurance Group acquired a 20% stake of the German mobility start-up ViveLaCar.
- Speedinvest raised € 190 million for its third flagship fund. All cornerstone investors have returned. Major commitments include EIF, Erste Group and U.S. based NEA, one of the world’s largest venture capital firms.
March
- Crowdinvesting platform Conda, part of the start-up ecosystem Startup300, launched conda-hilft.at to support small and young companies that were confronted with liquidity issues due to the pandemic outbreak.
April
- Elevator Ventures participated together with Speedinvest in a seed funding round to boost international efforts of the Russian ecosystem for farmers Agro.Club in Europe and North America.
- Bank99, the new bank of the Austrian Post, started operation.
- The Austrian government established a € 150 million Covid-19 start-up relief fund in order to support its domestic start-up environment.
May
- Billon and Raiffeisen Bank International successfully tested an end-to-end digitized national currency transfers proof of concept as part of the Elevator Lab acceleration program.
July
- Elevator Ventures led a € 2,5 million funding round for Pisano, a tech start-up focused on customer experience.
- The social start-up ESGplus closed a six-digit investment round to boost the expansion of its sustainability fund screening platform Cleanvest into Germany.
- Austrian Financial Market Authority (FMA) prohibited Commerzialbank Mattersburg from continuing its business operations due to suspicion of fraud.
- Boutique venture capital firm Calm/Storm Ventures established a new investment vehicle with a focus on early-stage start-ups and a maximum volume up to € 50 million.
August
- Raiffeisen acquired four branches of the Landes-Hypothekenbank Steiermark.
- Bumbus, a real estate lending start-up which turns assets into liquidity, closed a six-digit pre-seed investment round.
September
- Linx4, the one-stop solution for usage-based equipment financing, closed a seven-digit funding round. The capital will also be used to establish an investment fund.
- Morpher, one of the few fintech start-ups that uses blockchain technology to truly expand the known boundaries of technology, business and law, announced a $ 2.5 million funding round.
- The digital investment platform Bitbanda announced the successful completion of Series A investment round of approx. € 44 million.
- Bank Austria passed an ambitious and future-oriented coal exclusion directive. All coal companies that are customers have to get out of coal by 2028, otherwise they will not get any more money from the bank by 2021. After being challenged by Friday for Future, Erste Group and Raiffeisen International Bank stated their coal policy is currently under review.
- The Crypto currency platform for retail investors Coinpanion received a pre-seed funding in the amount of € 330k.
- Elevator Ventures participated in € 5 million Series-A funding round for the Turkish agro-fintech tarfin.
- Raiffeisen Bank International partnered with Elucidae to deploy standardized financial crime benchmarking.
October
- The B2C marketplace for trading bots Trality announced a € 1.5 million funding round to further invest in R&D as well as marketing.
- ErsteBank & SwatchPAY! announced exclusive partnerships.
- Bitpanda’s tech research project Pantos will be implemented on RBI Coin, an e-money pilot solution for interbank and intercompany payments.
- Raiffeisen Bank International and C-Quadrat established the Austrian Growth Capital Fund with a target volume of up to € 200 million in order to close the equity gap for high-growth SMEs.
November
- Vienna Insurance Group acquired CEE business of Aegon for € 830 million. Closing is envisioned for the second half of 2021.
- GooglePay launched in Austria, along with N26, Revolut, Curve, Monese and Viva Wallet.
- Fair-Finance launched the Social Entrepreneurship venture capital fund SEF.
December
- Speedinvest participated in a Series-B funding round of € 50 million of the French InsurTech Luko, which offers insurance for flats, houses, non-occupant owners, eScooters, buildings, and loans in less than two minutes.
- Bitpanda is going to invest € 10 million to establish an innovation hub in Poland, Krakau.
- Wüstenrot announced plans to establish its own bank for retail clients. Operations are scheduled to start on April 1st, 2021.
- Uniqa Ventures made 15 investments during the Covid-19 year.
Entire article
The entire article “5 predictions for the Austrian financial services market and its CEE footprint in light of the global Covid-19 pandemic” is available here.
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About
This is an updated version of the article “Five predictions for the Austrian financial services market and its CEE footprint”, which was initially authored by Tobias Schaller and published with Capco in February 2020.
Since summer 2020, Tobias acts as an independent trusted advisor via his own consultancy mosaikProjects.
The update provides insides based on latest available data and recent market activities and reflects the five predictions in light with the global Covid-19 pandemic throughout 2020.
References
[1] Austrian Federal Ministry of Finance; Structure of the Austrian Financial Sector
[2] mosaikProjects research
