Redalpine’s Swiss And German Fintech Investmentsby Fintechnews Switzerland June 22, 2016
Founded in 2007 by Peter Niederhauser and Dr. Michael Sidler, Redalpine Venture Partners is a Swiss early-stage venture capital firm focusing on European life science and information and communications technology startups.
Active in the fintech sector – an area it believes has a lot of potential -, Redalpine has signed key deals with the likes of Swiss digital insurance manager Knip, Berliln based digital bank Number26, and digital investment intermediary Cashboard, but also bexio and Givve.
Speaking to Fintechnews, Redalpine partner Dr. Harald Nieder, said that fintech and insurtech are two areas that still have a number of promising business models and technologies that are maturing. Naming the likes of blockchain technology, risk-tech, artificial intelligence and capital markets innovations, among other sub-segments, However, in some other subsectors, Niederexpects consolidation.
Throughout the years, Nieder has witnessed the industry evolving, pointing out that while during the first era, fintech ventures were essentially aimed at “un-bundling” financial services – citing for instance TransferWise in cross-border payments, and Zopa for peer-to-peer lending –, today, a new trend is emerging as a number of players and niche products are maturing.
He calls this the “re-bundling” where the likes of Number26 and Cashboard act as new financial hubs and marketplaces for products offered by fellow fintech innovators.
Europe’s fintech rising stars
Launched in January 2015, Number26 is a Berlin-based fintech company that wants to revolutionize the banking experience. Essentially, Number26 provides a mobile app that lets users manage their finances on-the-go and allows them to open an account in just eight minutes.
Similarly to its Vietnamese counterpart Timo or the American Simple, Number26 is not a bank of its own and it is its banking partner – in the case of Number26, Wirecard Bank –, that holds both customers’ money and the banking license.
Number26, which has recently received support from one of Asia’s richest men to fuel its growth, says it wants to act as a fintech hub and integrate other financial products into its apps, including credit, saving and insurance products.
Redalpine, which participated in Number26’s seed funding round in 2014, believes that there is high market potential for the product as it is aligned with the preferred user experience of the digitally native generation.
Cashboard on the other hand, is a robo-advisor that uses algorithms to create diversified portfolios made up of a wide range of assets, including exchange-traded funds, money market funds, bonds, social trading, private loans and equity investments in private companies.
Cashboard, one of the BBVA’s Open Talent 2014 fintech competition finalists, allows people to start investing with as little as €100 and does not charge into fixed fees. Cashboard earns commissions from their product partners and clients pay an annual 10% performance fee on net profits past a high-water mark.
Cashboard has a “far more compelling business model than the traditional ETF-based robo-advisors,” Nieder said, explaining what made his company invest in the startup in 2015. It has a “unique positioning in the otherwise very competitive robo-advisory and online investing markets,” he added.
Redalpine is also invested in bexio, a Swiss Provider of business-accounting software with strong FinTech angle and e-banking integration. Recently Bexio announced a partnership and integration with UBS E-Banking.
Another sub-segment which Redalpine is particularly interested in is insurtech, where the firm “[sees] and [expects] lots of action in the startup space.”
When Redalpine signed a deal with Swiss digital insurance manager app Knip in 2014, the firm became one of the first VCs to invest in that space, Nieder said.
Insurance is ripe for innovation across the entire value chain; and yet, the insurtech industry is still lagging behind.
“Insurance didn’t have the crisis we saw in the financial sector to jumpstart disruption and a lot of areas in insurance require startups to have in-depth insurance knowledge,” Nieder said.
“We expect a lot more disruption in the insurance space, as knowledge transfer to startups continues. We also see this driven in large part out of Europe, where again, we have a co-existence of insurance know-how and start-up ecosystem.”
When asked about his views on the fintech sector in Europe, and most particularly in Switzerland, Nieder argues that there are a lot of untapped opportunities.
Somewhat overshadowed by its neighbor the UK, and especially London, Switzerland could do much better in the field given its financial expertise and improving startup culture. This echoes previous comments that have been made by other industry observers who argue that Switzerland is lacking, in part, governmental support.
That said, Nieder remains optimistic in the future of the European fintech scene as he believes that the location provides “the most fertile breeding ground for fintech startups.”
Featured image by ra2studio, via Shutterstock.com.