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Q&A with Stefan Tirtey of CommerzVentures

1. Tell us a bit about yourself.
My name is Stefan and I am MD at CommerzVentures which I helped kicking off in 2014. I have been investing in early-stage technology ventures for over 15 years now, having previously worked for Doughty Hanson Technology Ventures and Earlybird. I have invested in a number of tech, b2b and b2c companies. I was the first VC to invest in SoundCloud and served 5 years on its board. Currently I work with our portfolio companies etoro, Marqeta, Mambu, and Omnyway.

2. What is your investment focus/thesis, and which FinTech firms are in your portfolio?
CommerzVentures is a specialist VC fund with an exclusive focus on fintech and insurtech opportunities. Commerzbank is our sole backer. As a financial investor we have a single minded focus on delivering financial returns for our investor. We like to back founders with big ideas and an ability to articulate why they can dominate a particular market. We invest from Series A onwards across Europe, Israel and the US. Our portfolio includes:  Marqeta, eToro, Mambu, GetSafe, PayKey, OmnyWay, Bankin’, and iwoca.

3. What made you invest into Bankin and why?
We invested into Bankin’ because it solves two relevant problems. First of all, people are using an increasing number of institutions and internet platforms for different financial products, but have no central place to consolidate and manage their accounts from. Second, the UX of retail banks’ mobile applications is still subpar and often these apps lack any additional value-adding features. Bankin’ solves both problems with a beautifully designed and intuitive app that offers account aggregation as well as personal financial management features that make life easier for the user. Two million people have already signed up and are actively using the app to manage their finances. Surprisingly, most of these only connect one account to the app, showing that the UX of Bankin’ is far superior to that of the native bank apps.

4. What is your takeaway from 2017 and what can we expect next year in (European) FinTech?

  • 2017 has been an interesting year for fintech. Investment into our target sectors continues on a high level. Competition for the best teams / companies is fierce. We saw many mature startups making significant progress operationally and raising large financing rounds to support their further growth. The historic European way of capital efficiency (aka “starving companies to success”) is clearly being replaced by an environment where the best European founders can raise huge rounds much like their US peers. We see more and more non-traditional players making investments: there are multiple strategic investors competing for business with pure play VCs. We also see more and more senior executives from the banking and insurance sectors backing their former colleagues. The resulting deal structures (and valuations) are not always conducive to raising subsequent financing from institutional VCs.     
  • One cannot write about 2017 and not mention crypto. Exchanges and brokers saw and see their businesses booming, fueled by skyrocketing prices and media attention. The same goes for ICOs and the scandals that came with it. I imagine us to be somewhere behind the peak of the Hype Cycle: expect lots of disappointment (and lost fortunes) and some huge successes. Now that regulators are firming up their positions, the industry is getting to work, building the infrastructure and services that will allow for legally compliant ICOs. One way or another, ICOs are here to stay.  
  • The B2C vs B2B mix in our deal flow is continuously changing towards B2B. Some companies that originally started as B2C models (Robo advisors!) are now positioning themselves as enablers for traditional financial services providers that have brands and consumer access. That said a number of “high velocity” consumer finance companies continue to attract large sums of financing (e.g. Transferwise). Moreover, an increasing number of companies try solving problems for banking operations: e.g. in KYC, in becoming compliant with regulations such as GDPR, Mifid II, and PSD2, and in IT operations.