German fintech firm Deposit Solutions is targeting an initial expansion into the Swiss market after successfully raising $100 million at its recent investment round. The Hamburg-headquartered firm pioneeringly allows people to access the best interest rates from different banks without having open new accounts with each lender.
This round of fundraising was led by European private equity firm Vitruvian Partners, as well as Swedish investment company Kinnevik and existing shareholder, the venture capital fund e.ventures. Deposit Solutions is now valued at $500 million, more than double of what it was last year.
Fundamentally, the firm is unique in that it allows banks to offer third party deposit products to their own customers through their existing accounts. Since its inception in 2011, the firm has facilitated the deposit of more than $10 billion through its Business to Consumer (B2C) sector, while its Business to Business (B2B) platform has connected partner banks in 16 European countries.
The expansion into the Swiss market will come through the firms B2C offering. Currently, the firm runs its own proprietary Points-of-Sale service under the brands of ZINSPILOT and SAVEDO allowing partner banks to market their deposit offers directly to savers.
ZINSPILOT allows German consumers the opportunity to use the daily and fixed-term offers of many banks based in the European Union through one single account as opposed to opening numerous separate accounts with different banks to make different deposits. Banks are also only listed on the platform if they have been rated Investment Grade by at least two of the three major rating agencies: Fitch, Moody’s and S&P. The platform aims to benefit the German consumer by ensuring that they are not dependent on the low daily or fixed interest rates of their house bank.
SAVEDO acts as the international B2C platform for Deposit Solutions, using the same software as ZINSPILOT and is currently available to consumers in Germany, Austria and the Netherlands.
Dr. Tim Sievers, the CEO and Founder of Deposit Solutions explained that the firm could launch their B2C offering in Switzerland as early as October. “The Swiss market has a deposit base in several currencies,” Dr. Sievers explained. “So, Swiss Francs of course and then Switzerland is also one of the largest markets for US Dollar denominated funds outside of America and it also has a significant Euro base which makes it attractive. Germany is already a deep deposit market for Euros and our expansion will continue to focus on Europe for the time being. Our business is working – we’ve proven it and we have so much room to grow.”
He also said that he expects the firm to expand into a further three European markets in the months after the Swiss launch.
Deposit Solutions rapid success has somewhat left the firm playing catch up in terms of raising awareness about their business. As a result, Dr. Sievers also plans to use the funds raised not only to also provide further investment in their current markets but to make new banks in other countries aware of their platform. “Many banks simply don’t know yet what we do and we’re aiming to change that,” he said.
Dr. Sievers named the United Kingdom as an example of a target market where he said he hoped to attract banks currently unaware of their platform. “We plan to roll out our sales platforms across Europe so that new banks can use out platforms and then serve their customers with the deposit options available,” he said.
For Vitruvian Partners, Deposit Solution’s rapid growth over the past year made their decision to invest an easy one. “As a pioneer of Open Banking, Deposit Solutions has shown remarkable performance in rolling out true innovation and enabling a marketplace for one of the most important product categories in banking,” a spokesman said. “The company already operates the leading platform for savings deposits in Europe. With our expertise in scaling high growth technology companies, we will help accelerate the growth of the business even further.”
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