Verivox, Outbank, and Clark: some disruption, FinTech-stack, and fighting incumbents

In November, the comparison portal Verivox acquired Outbank, a personal finance manager (PFM) who temporarily filed for bankruptcy and aboalarm, a contract cancellation tool (Link to Outbank’s German press release, Link to Verivox’s German press release). A lot can be written about that. For starters, why they made that acquisition. Verivox’s reasons for acquisitions: response to CHECK24, additional marketing channel, and response to FinTechs/InsurTechs Looking at CHECK24’s — their primary competitor — recent moves, probably the most obvious reason is that Verivox made the acquisitions as a response to CHECK24. Furthermore, when considering that Outbank is layered atop Verivox, I am arguing that Outbank might be an additional marketing channel (to TV and search) and thus more important to Verivox than Verivox to Outbank. Finally, through that acquisition, they might, in fact, be responding to FinTechs instead of attacking them. Verivox’s reasons for acquisitions: response to CHECK24 In May, Capital (news in German) reported that CHECK24, one of Verivox’s biggest competitors, will be offering several „FinTech products“. Among them a contract management tool, a multi-banking feature and an expansion of their comparisons into fixed-term deposits. Whereas this was often quoted as an attack on FinTechs (amongst others Clark, WeltSparen, and Outbank),

kwitt, Lendstar, and Cringle: timing, feature vs. product, and activities-based banking

Venmo, MobilePay, Cookies, kwitt, N26’s MoneyBeam, PayPal, Wavy, Lendstar…and now Cringle. All of these services, apps, and companies have in common that they are used for P2P payments. Some of them failed, some of them are very successful, some will be and some won’t. Cringle, the Berlin-based startup, believes that it can be successful and has thus started their second crowdfunding campaign on Companisto (link to campaign). Besides P2P payments, Cringle also wants to offer a B2B payment solution allowing retailers and online shops to accept payments through Cringle. I won’t go into their B2B offering, but it merits to say that the German online payment market is dominated by PayPal, bills, debit and credit cards, and that the mobile payment space is yet to be dominated. Here I will look on their P2P payment solution. P2P payments not compatible with how money is handled in Germany and niche approach to circumvent incompatibility From a fundamental point of view Cringle’s success depends on process innovation. Process innovation can be defined along the following lines: „Process innovation means the implementation of a new or significantly improved production or delivery method (including significant changes in techniques, equipment and/or software)“ [8]. And Cringle is

ING-DiBa, N26, revolut: fairly good incumbents and FinTech re-unbundling

According to Gründerszene, the Berlin-based solarisBank might raise a Series B. Whether this will indeed happen does not matter (the news is actually from October). What matters, however, is solarisBank’s position in the FinTech value chain. solarisBank is a banking platform which owns a banking license and offers financial services such as bank account management, credit card issuing or KYC (know your customer) services. In short, the bottom of the stack, the infrastructure of FinTech companies — as some would say — the boring stuff. In contrast, N26 and revolut are doing the exciting, customer-facing stuff; offering an easy to use, nice looking banking app. From a strategic perspective, however, the „boring“ stuff, is actually the sexy stuff (if banking can be sexy at all). This is not only because solarisBank per se is attractive (in many cases they are the backbone of FinTechs), but also because N26 and revolut are playing in an extremely difficult market. Slow customer acquisition and market saturation Whereas there are several difficult things about banking, the one I am referring to is customer acquisition. For instance, Scalable Capital, a robo advisor partnering with ING-DiBa, shows how difficult customer acquisition can be and, in turn,

GETAWAY a German P2P carsharing start-up that got rejected on Die Höhle der Löwen (DHDL)

In the course of the German start-up show Die Höhle der Löwen (DHDL) GETAWAY, a P2P car sharing startup, pitched but got rejected. GETAWAY wants to enable spontaneous car renting. The investors rejected the start-up because they do not own the appropriate expertise, considered the valuation too high or because they thought that the capital required to get the company started was too high. Most of the money GETAWAY wanted to rise would flow into equipping each registered car with a hardware module that coordinates the sharing (tracking time and fuel, and allowing access to the car through the app). GETAWAY installs this hardware module and if you an early adopter in a certain area you will get it for free. Getting one car ready costs the company between 400€ and 450€. This is a lot of money especially if the startup does not charge for it. Hopefully (for GETAWAY, not users) it is a proprietor system so that no other competitor could build upon their infrastructure. The car’s owner determines the price you pay for a drive and insurance is included in it. The company wants to finance all that by a 33% commission. Edgar Scholler, the CEO of

€300 Million for paydirekt, €500.000 for happybrush

paydirekt might get €300 Million from its founders. It is estimated that paydirekt has already received €100 Million. At the same time, paydirekt’s CEO, Niklas Bartelt, should be replaced (from Süddeutsche). paydirekt was founded by a couple of German banks in 2015 and offers C2C and online B2C payments. Martin Zielke, board chairman of Commerzbank, argued back in 2015 that paydirekt was not founded with the idea of replacing the competition, but rather co-existing with them as — so Zielke — the online payment space has room for more than one company (from Süddeutsche). I agree with Zielke, but it is also a very undifferentiated market where people won’t switch unless given a very good reason. The most significant reason in C2B is network size, i. e. how many shops support the system. This significance of network size implies the vital role of pull marketing; there is little use in convincing people to sign-up for a new service now, so that they can use it later. Instead, people will access an online shop, realize that there is a payment solution they do not have – but need – and thus sign-up for that very service. paydirekt’s push marketing questionable This

Cara, a German PoopTech-startup, received a $2 Million investment for a food diary and tailor-made drugs

Cara is „Your personal food and symptom diary“ with which you can track your stool’s condition, your digestion, mental situation and the food you consume. Based on this information the app provides you recommendations on how to adapt your lifestyle and offers you tailor-made medicine called „Cara Biotics“ against your gut issues. Recently, the company behind the app received a two million dollar investment (link in German). This means that Cara operates in three markets: AI-based drug discovery Health tracking: stool’s condition, you digestion, mental situation and the food you consume Health treatment: recommendations and Cara Biotics Let’s first examine health tracking and treatment. Health tracking For this use case, the Cara app is simply a diary. There are two issues with that. Firstly, switching costs. Users can extremely easy switch between other apps especially as Cara allows you to export your data. However, data is what could lock people into the app, provided that they allocate enough of it. And this is the second issue; habitual usage. For Cara to be of real value users must use it frequently. Convincing people to use it regularly will be very difficult but not impossible.The Hook Model offers an interesting insight into

Sono Motors, a German car startup, crowdfunded €1 Million for the first car financed through the crowed

Recently Sono Motors, a German car startup, announced that they reached their €1 million crowdfunding goal only a few days after the start of the campaigns (on Seedrs and WiWin). The goal of these campaigns, which are still running, is to collect money to start the mass production of their first vehicle, the Sion, in 2019. Before that, Sono Monotors also crowdfunded money for the first prototype of the Sion and reached €549,895 on Indiegogo. The Sion by Sono Motors (Source) That is interesting because it is the first time a car is financed by the crowd and despite it being a car it has raised less money than other less sophisticated projects. The Pebble Smartwatch, for instance, has raised over $20 million. However, once you realize that they are a car coordinator instead of a manufacturer these comparisons make more sense. Sono Motors is neither manufacturing the components nor building the car itself. Nevertheless, the Sion is an interesting concept with some flaws, however. The Sion The Sion is an electrically powered vehicle that has solar panels on all non-glass parts of its body. The battery provides the Sion with a range of 250km. The on-car solar panels which the

simplesurance, getsafe, Coya, and ONE – convergence, emotions, and power of customer base in FinTech

The German mobile bank N26 announced that they are expanding into the USA. This announcement comes almost exactly one month after revolut, their biggest competitor, launched its operations in Austria and Germany (I wrote about revolut in revolut, N26, and the future of banking). Also, this announcement comes only a few days after revolut’s announcement of the cooperation with the InsurTech startup simplesurance. simplesurance — a test case for simplesurance and the industry This partnership is interesting due to several reasons. Specifically, in regards to simplesurance, it is interesting because their simplesurance’s solution for revolut does not stem from their standard offering. simplesurance, the Berlin-based FinTech, has three offerings: B2C products such as simplesurance.co.uk through which they offer insurance for consumer electronics, insurance cross-selling for e-commerce, and an insurance broker. I guess that this is a test case for them and — if successful — going to integrate that as a standard offering. As it is concept-wise similar to their cross-selling solution, it makes sense to incorporate that into their offering from a portfolio perspective. From an industry-perspective — and this is another interesting aspect of this cooperation — it makes sense as well because it points at the convergence of

BuddyGuard & Chatterbug: storytelling, smart home network effects and the future of EdTech

BuddyGuard, the Berlin-based smart home startup, raised €3.4 Million from Bachmann Group for their AI-empowered security camera called FLARE. BuddyGuard’s FLARE: AI-enhanced security camera with service add-ons BuddyGuard’s FLARE is an independently acting camera, equipped with, amongst others, a battery, Wi-Fi, cellular, motion sensors and a microphone. Using these features and the built-in AI-capabilities, FLARE detects conspicuous movements or noises and alerts first responders if necessary. The AI distinguishes between you (including your pets) and unknown people and acts accordingly. You can further enhance the FLARE’s capabilities by subscribing to one of BuddyGuard’s add-ons. These add-ons are BuddySIM (for when Wi-Fi is unavailable), BuddyReact (for automatic contacting the police and a live-stream to BuddyGuard’s monitoring center), BuddyCall (call and text alert in the case of unexpected activities), and BuddyCloud (cloud for the video material). The FLARE itself costs €449 and BuddyGuard markets it as products for B2C and B2B. BuddyGuard’s FLARE (Source) FLARE’s difficult positioning in a crowded market due to high price and low brand recognition FLARE’s main difference compared to alternatives is their AI. Other cameras have similar functionality. For instance, several are equipped with motion detection, animal- or voice detection. However, as none of them comes with AI technology,

byte heroes, HydroMine, and Wysker — first ICOs in Austria and Germany

 In the last couple of days four ICOs have been announced in the DACH-area: HEROCoin by byte heroes (Austria’s first ICO) H2O by HydroMiner wys by Wysker (Germany’s first ICO) CTD by Cointed Here I will cover HEROCoin, H2O, and wys. As Cointed was accused of fraud, it deserves a more detailed look and I will do so separately. ICOs in general, are a fascinating topic and I am equally excited that we have them now in Austria and Germany as well. In this post, I am going to focus on the white papers and only briefly touch upon the startups itself. Due to lacking regulations, there are no binding guidelines regarding what such a white paper should contain or a company-specific coin should be. However, what struck me was How little information about the current state the white papers provide: finances, competition, and market overview, for instance, are sparsely elaborated How little information about the future they present: wysker is the only company to provide measurable metrics for assessing progress (and these metrics are not the most useful ones) The lack of an economic model for the coins: I believe that the issued coin should be tied to the