Q&A- Startups

7 Questions with Stephan Heller, Founder of FinCompare GmbH

1. Who are you?

I’m Stephan, Founder and CEO of FinCompare – a fintech platform for SMEs to find, compare and close financing options from over 200 lenders. This is my second startup. Previously I founded Watchmaster.com which is Europe’s largest online marketplace for luxury watches. I’m originally from Munich but didn’t live there in over 15 years. I studied in Vienna, London, Paris and Berlin and used to work as a management consultant before entering the startup world in 2011.


2. Which services do you sell and who are your competitors?

The goal of FinCompare is to become the leading financing platform for SMEs by using technology to offer a convenient one-stop destination for all their financing needs. The financing market for SMEs is extremely fragmented and there are hundreds of offers available, but they are often very hard to find. We help businesses to find, compare and close the best offers in the market. This service is free to them and we get paid a commission by the financing provider. Our biggest competitor are offline corporate finance advisors, but they charge a lot of fees upfront and do not offer the same digital process. Other online players in this space are Lendio (US), Capitalise (UK), Fundera (US), Biz2Credit (US), Compeon (DE).

3. How did you get your startup idea and how did you finance your startup?

While I was building Watchmaster, we were putting inventory on our own balance sheet and I had to learn how important working capital is. While trying to find debt financing solutions, I noticed that the financing market for businesses is very fragmented and that there is no easy access for SMEs to find the right financing solution. I was disappointed by the obscurity of information about the best financing solution specified for my company and realized it as a great chance to cover this gap by building a digital platform. And so FinCompare was born.

4. What were the biggest challenges in starting?

The main challenge operationally is to connect both worlds, the SMEs and the financial institutes. Both sides are used to work offline and are not familiar with online processes, however both realise that it is benefitting them. So our mission is to facilitate both sides in the digitalization process of SME financing.

5. What areas within FinTech do you personally find most interesting and why?

For me B2B FinTechs are the most interesting development over the past years. We have seen very cool companies emerging to cater specific needs of SMEs. However this influx of new players as well as the digitisation of offline banks made the market even more crowded. In Germany we have over 1800 banks (!). Making sense of all this in a scalable way excites me a lot. Data driven advisory services, API banking and financing solutions for SME customers will be inevitable services that larger banks and finance providers will need to implement and deliver to customers. There is extreme pressure from regulators (PSD2), cost pressure and from customers, who are switching to competitive banks. Fintechs can solve this.

6. What opportunities do you see for FinTech startups in the DACH region, and how can we help to accelerate it?

The entire market has changed from Fintechs fighting banks to Fintechs partnering with banks. I think this is exactly the right development. However, what we need more in Germany are not “labs” or “corporate incubators” but a real commitment by banks and corporates to invest into startups and fintechs alike. The key here is acqui-hires. This is very common in the US and other countries but in Germany corporates and banks rather steal ideas and then fail, than to buy a great young company with an innovative team and do the work to implement their technology.

More concretely in the case of FinCompare, we see that most SMEs still work with their house bank and that the market is non-transparent and fragmented. Most firms are not aware of new financing opportunities besides the regular credit, so our job is to provide them a transparent and easy access to a pool with many different financing solutions customized to their company’s needs. So getting awareness among SMEs would help us to accelerate even more.

7. What tip would you like to give FinTech entrepreneurs?

There are three tips that I would like to share:

1. Done > Perfect: Done is better than perfect. This is the number one problem for most entrepreneurs and employees alike, especially in Germany. The key here is to have very good attention to details and constantly release, fix and improve things. Nothing is ever “perfect”.

2. Execution > Idea: Execution is everything, ideas are worth nothing. Ideas totally get overvalued. They don’t matter. A great team and persistence will always win and you don’t need a lot to build a prototype and test your idea. Get building and stop analysing.

3. Timing > Experience: Timing is more important than experience. Facebook was not the first social network – they just did it right. iPhone was not the first smartphone – Apple just made it work. We are all standing on the shoulders of giants who came before us. Steve Jobs said: “If you take something and make it your own … it’s your design and that is the dividing line between copying and stealing. That is part of Apple’s DNA.” By this I mean learn what is already out there and make it your own. It’s always easier to start at 60% and improve it, than to start from scratch even with years of experience in a certain field.