Berlin startup Cashboard raises €3 million as German fintech momentum continues
Cashboard, a marketplace for investment products, has raised the sum from Digital Space Ventures, a $50 million (£40.2 million) fintech fund headquartered in Luxembourg. Existing investors Redalpine Capital and Earlybird also to part in the round.
Recent figures showed that investment into German fintech companies outpaced British rivals in the third quarter of the year. UK companies raised $78 million in the third quarter, compared with Germany's figure of $108 million.
German fintech is now on track to attract more investment than British fintech in 2016, according to KPMG and CB Insights, the first time the UK has not been the European fintech capital since the pair began monitoring funding in 2011.
"Germany in the last year, it has moved to be one of the core areas for fintech," Cashboard CEO Robert Henker told Business Insider.
"Europe, in general, is quite segmented, which means it's hard for European startups to reach scale compared to the US. With fintech, it's quite easy in Germany because it's a good continental market. The legislation, although quite fragmented, is relatively harmonized in Europe."
Germany's overtaking of Britain is driven not just by its flourishing fintech sector but also by a post-Brexit vote slowdown in investment in Britain.
Henker said: "All the investors I talk to in the UK say we don't know clearly the implications of that [Brexit] yet. It is possible that there are also conversations going on regarding Frankfurt, Berlin, and Paris. I think that even if Brexit will come in a way that people don't want, Frankfurt or Berlin will not be the next London. But what I experience is that UK founders and the UK
But he added: "I think that even if Brexit will come in a way that people don't want, Frankfurt or Berlin will not be the next London. But what I experience is that UK founders and the UK fintech scene have learned that the scene in Berlin is quite competitive. You have quite international crowds out here. Second, the living costs are quite low."
Cashboard is an investment platform that lets people invest their money across a variety of instruments and a variety of providers.
Henker said: "The main USP is quite simple: we are the only provider independent and asset class comprehensive platform in Europe, meaning that whereas others sell their own stuff, we are the only provider of an independent marketplace. With us clients can invest from one bank account into all the traditional stuff like bonds, stocks, core money, ETFs, as well as online and alternative investments such as peer-to-peer lending."
The company, founded in 2014, has over 10,000 customers and is growing between 10-20% each month, according to Henker.
Cashboard is currently only marketing itself across Germany and Austria but Henker says it has already attracted international investors.
"We have already had international clients from France, UK, but also China, Russia, Brazil," he told BI. "Although our website is not available in English, they come, maybe by word of mouth. Our biggest international client is Chinese. Our Chinese clients, we found out later, came through Chinese people who work for German corporations - an engineer for Audi for example. They opened up an account with us and then introduced them to their family and friends.
"Our Chinese clients, we found out later, came through Chinese people who work for German corporations - an engineer for Audi for example. They opened up an account with us and then introduced them to their family and friends."
Henker said the funding will go towards expanding Cashboard's team and scaling up the business. He added: "For the internationalisation itself, we are looking to do a bigger round towards the end of next year."
When Cashboard does target international expansion it will focus on Asia and Eastern Europe. "In Europe and America there's a lot of competition in that sector, but in Asia and Eastern Europe, clients are very good but interestingly the offer of startups and banks is behind Europe," he said.
"As soon as we are in China, Chinese investors will be crowdfunding real-estate projects in Germany and investing into the UK."