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B2B only: Spotcap sells credit business to Ferratum

The Spotcap-Ferratum deal is further proof that the German fintech industry is being shaken up in the corona crisis, at least in the credit sector. At the beginning of September, the Düsseldorf-based market leader Auxmoney sold a majority stake to a US investor. In the same month, the once largest German financial startup, Kreditch (now known as Monedo), slid into insolvency.

Desmond O'Flynn

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The Berlin-based fintech company Spotcap is selling its remaining credit business to Finnish competitor Ferratum, according to a press release published on the morning of October 19th. Instead, Spotcap now wants to focus on its B2B business, which is called “Lending as a Service.”

The Berliners had recently celebrated their first tender successes in this area. According to earlier press releases, Spotcap’s white-label platform has been in use at the Austrian Bawag since 2018 and, for the past few months, at the Swiss Cembra Money Bank. According to Spotcap CEO Jens Woloszczak, the B2B business “already accounted for more than 50% of revenues.”

Spotcap was founded in 2014 by Rocket Internet and, according to its own statements, has so far granted SME loans in the amount of a good $531 million (€450 million). At the beginning of 2016, the entry of the Russian Fintech investor Oleg Boyko, who is also involved in other areas in this country, caused a sensation. After that, there was no news worth mentioning about Spotcap. 

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The deal between Spotcap and Ferratum shows that the pandemic has affected the local Fintech industry

According to the 2019 annual report just published in the German Federal Gazette, the cash burn of the Berlin-based “Spotcap Global Services GmbH” last amounted to a good $24.8 million (€21 million) in aggregate. Behind this is another Luxembourg company. A year earlier, 67 employees were working for “Global Services”; in 2018, the average number will be only 55.

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The Australian end customer business had already disposed of Spotcap last year. With reference to the Corona crisis, no new business was conducted in the UK. In addition, Spanish business has also been largely scaled back, leaving only the Netherlands as the only remaining core market – which is now going to Ferratum (or Ferratum’s SME brand “CapitalBox”).

The Spotcap Ferratum deal is further proof that the local Fintech industry is being shaken up in the corona crisis, at least in the credit sector. 

Other fintech companies that will end their business on the German market or which have financial problems 

In March, the Berlin subsidiary of the British heavyweight Funding Circle had already announced that it was discontinuing its new business in Germany. Shortly afterward, the Berlin factoring Finiata also declared that it would no longer accept new business in that country.

At the beginning of September, the Düsseldorf-based market leader Auxmoney sold a majority stake to a US investor.In the same month, the once largest German financial startup, Kreditch (now known as Monedo), slid into insolvency.

In October, Finanz-Szene.de reported, citing Linkedin data, that virtually all German credit fintech companies, with the exception of Billie and Lendico, seem to have shrunk their workforce recently.

The German fintech sector has clearly been affected by the coronavirus pandemic. Some of them have declared insolvency, while others are struggling to cope with the current crisis.

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(Featured image by Shvets Anna via Pexels)

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Desmond O’Flynn believes in minimalism and the power of beer. As a young reporter for some of the largest national publications, he has lived in the world of finance and investing for nearly three decades. He has since included world politics and the global economy in his portfolio. He also writes about entrepreneurs and small businesses, as well as innovation in fintech, gambling, and cannabis industries.