In the German fintech industry, the next major funding is perfect. According to exclusive information from Finanz-Szene.de and Finance Forward, Berlin-based investment startup, Moonfare has raised $125 million (the equivalent of just under €110 million) from investors. The round is led by U.S. investor Insight Partners, and the valuation is likely to be in the range of around half a billion euros, according to financial circles. Moonfare confirmed the amount of the funding on Monday, but would not comment on the valuation. According to our information, the financing was finalized at the end of last week and is expected to be officially announced as early as this Tuesday.
The Series C round (which swells the total funding to $185 million) should make Moonfare one of the ten most valuable fintech companies in this country. At first glance, the Berliners belong to the caste of digital asset managers. However, unlike Scalable Capital or Raisin Invest, for example, Moonfare investors’ money does not flow into shares or ETFs. Instead, it goes into alternative assets – or more precisely, into private equity. The target group is wealthy private investors, who can invest via the Moonfare platform with a comparatively modest minimum investment $58,000 (€50,000) in vehicles that are otherwise reserved for the ultra-rich or institutional investors.
While the assets under management of the fintech, which was founded in 2015, developed rather sluggishly in the early years, the business model has gained traction in recent months in a striking manner – see also the table below. In early September, Moonfare cracked the $1.16 billion mark (€1 billion mark) in customer funds, which is considered critical. To put this in perspective, of the more traditional digital asset managers, only Scalable Capital, Liqid, Raisin Invest, and Quirion have managed to do this so far (excluding neobrokers like Trade Republic or Smartbroker).
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A Moonfare investor invests on average $637,000 (€550,000)
According to company information, the assets under management (as of, as I said, the beginning of September) are distributed among 1,800 investors. In other words, an average customer has invested around $637,000 (€550,000) via Moonfare. The fintech company has not yet published any business figures; the fee structure cannot be viewed from the outside. The “NZZ” once reported that the ongoing fees are supposed to be 0.5% and the issue surcharge is supposed to be 1%.
On top of this come the fees of the target funds (i.e. the actual private equity fund) – which, from an investor’s point of view, should be significantly higher than the 0.5% that Moonfare charges for its own platform services. Taking the AuM performance in the chart below, the 1% front-end load, and the ongoing 0.5% fee as a benchmark, Moonfare could end up with revenues somewhere in the very low double-digit millions this year.
Moonfare’s founder and CEO is Steffen Pauls, the former German head of the American private equity fund KKR. According to the company’s website, the Berlin-based company cooperates with some of the world’s largest financial investors – including, in addition to KKR, Apax, Cinven, Permira, EQT, and Silverlake. Moonfare last caused a stir in the spring. At that time, the American fund giant Fidelity took a stake in the startup and also announced that it would include Moonfare products in its own distribution. Fidelity also went along with the current Series-C.
According to Moonfare, the $125 million will be used to further improve the products and for international expansion. So far, the Berlin-based company says it operates in 13 countries in Europe and Asia. The number of employees is said to be “more than 80 in tech and product alone”; apart from Berlin, the fintech has offices in Hong Kong, London and Luxembourg.
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First published in finanz-szene.de, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
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