Ex-Deutsche bankers win Goldman as investor in their start-up

FRANKFURT • A financial technology (fintech) firm based in a backyard of Berlin’s trendy Prenzlauer Berg district has found a new prominent investor in Goldman Sachs Group Inc.

Elinvar’s new funding round was led by the US bank’s Principal Strategic Investments group, CEO Chris Bartz said in an interview. Existing shareholders Ampega Asset Management and Finleap also participated. According to Bartz, the firm’s total funding now stands at over €20 million (RM91.74 million), with most of the money coming from the current financing round.

“We want to use the funds for growth and are also thinking about expanding outside Germany,” said Bartz, who spent about 20 years in the banking industry before he helped set up the fintech company, including a decade at Deutsche Bank AG. COO Marco Neuhaus also used to work for Germany’s largest bank.

The three-year-old firm has built a digital platform to enable lenders to offer their services online. Its customers include German banks MM Warburg & Co, Donner & Reuschel AG and Fuerstlich Castell’sche Bank, all of which were established more than 200 years ago.

German banks still have a lot of catching up to do in digital distribution, according to the two Digital Banking Index from strategy consultant Oliver Wyman, which evaluates the current state of digitisation of around 70 banks from six European countries.

Elinvar receives a share of the revenue that banks generate through its platform. The company employs around 80 people and expects to increase that number to 100 by the end of the year. With the current round of financing, Goldman Sachs will hold 13.9% in Elinvar, while Ampega Asset Management and Finleap each own 32.8%. The rest belongs to the firm’s founders and employees.

“Elinvar has developed innovative technology that can help accelerate the digitisation of the asset management industry. We are impressed with the vision and determination of the management team,” James Hayward, ED at the Principal Strategic Investments group, said.

According to Bartz, Elinvar is not yet profitable. “For us, it’s all about growing and achieving economies of scale right now,” he said. — Bloomberg