According to Finanz-Szene.de, the Berlin-based fintech Upvest, founded by two former Finleap managers, has raised a further $6 million (€5 million) – and at the same time is attracting attention with several prominent new additions. Thus, the former Raisin investment head Til Rochow joins the B2B startup as well as the former Transferwise B2B technology head Juha Ristolainen and Christian Schäfer (formerly Flatex).
New to the group of investors is the German flagship VC Earlybird. In addition, the existing investors who initially invested $8.5 million (€7 million) in Upvest at the end of last year – including Holtzbrick Ventures, Partech, IDnow founder Felix Haas and N26 founder Maximilian Tayenthal – have also subscribed.
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Upvest is about the safekeeping of securities
Upvest is one of those rather complex “as a service” fintech companies, where the inclined viewer doesn’t really understand at first what service it’s supposed to be about now. To put it simply: If Solarisbank stands for “banking as a service”, then Upvest could at some point stand for “investment as a service”. Whereby this is almost too simple again. Perhaps we should say more precisely: “Custody as a Service”. In other words, it’s about the safekeeping of securities. Or, as Upvest CEO Martin Kassing himself puts it: “Our business model is based on a scalable API interface that facilitates the brokerage and custody of investment products for our customers.”
Now, it is interesting to note that when Upvest came out last year, it initially presented itself as a blockchain fintech company. Whether this positioning was due to the fashionable thing to do at the time, or whether there was always a plan to start with crypto solutions and then move into the old world, so to speak – that remains to be seen. One thing is certain, however: In recent months, Upvest has already conquered one or two reference mandates via the blockchain route. For example, the Upvest technology is behind the token-based bonds of the largest German real estate crowd financier Exporo. Another reference customer: Publity, the Frankfurt-based real estate specialist experimenting with blockchain solutions, also relies on Upvest.
In any case: While Upvest could be located in the real estate crypto corner with a clear conscience so far, now comes the advance into the so to speak classic securities business. Incidentally, also in regulatory terms: until now, the Berlin-based fintech company has been operating on the basis of a Bafin permit for the custody of crypto assets. Now a license as a securities trading bank is to follow. “We plan to obtain the securities trading bank license in Q2-Q3 next year,” CEO Kassing said.
The strategic plan boils down to Upvest’s future as an API-based securities trading bank, so to speak, sandwiched between all kinds of securities providers on the one hand and all kinds of end-user fintech companies on the other. So it’s basically a 4.0 version of what DAB Bank does for Raisin, what Baader Bank does for Scalable Capital, or what HSBC does for Trade Republic. Of course, the “4.0” presupposes that the noble claims will now be followed by deeds. Upvest would not be the first German fintech to fail in this regard.
What does all this have to do with N26?
Well, if Upvest wants to be the “middle layer” that sits between the securities provider and the end-customer fintech company, then N26 is of course the end-customer fintech company that (at least in terms of the German market) every middle-layer player out there is aiming for. Especially since N26 has been rather weak on the securities side so far. However, it has declared its intention to change that.
Will Upvest be the enabler for the N26 attack on neobrokers? Upvest CEO Kassing says on this, “I don’t want to say anything about that.” And he doesn’t say it flirtatiously. Rather, he says it in a “I’d actually rather this barrel not be opened” tone.
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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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