SavingGlobal, a European marketplace for Deposits, Raised €7.5M
Investment to fuel new phase of growth in core German market, prior to pan-European expansion. Contracts signed with 3 new bank partners in the last 4 weeks.
Berlin, Germany Against a backdrop of abysmally low rates for depositors, SavingGlobal launched, six months ago, a simple platform to enable German savers to access to the best fixed deposit rates in Europe, from the comfort of their browsers.
According to a recent study by Postbank, German savers lose 14bn in purchasing power annually because bank deposit yields are currently stuck below the inflation rate. With the offers available exclusively through the SavingGlobal (www.weltsparen.de) platform, German customers can instantly increase their deposit yields from an average of 0.6% to up to 3.3% annually.
In practice, this means that a German saver with 100,000 in a local bank would typically only earn 600 (e.g. 0.6%) interest over the course of a year. In contrast, by using SavingGlobal to find the best available rate, they could move their money to an account in a Bulgarian bank partner for instance, and multiply their annual interest by a factor of more than 4x to as much as 2,500 (e.g. 2.5%).
Although current regulations allow depositors to open savings accounts in any bank within the European Economic Area to access higher rates, in reality few Europeans are prepared to do this. Not only do procedures differ markedly from bank to bank and from country to country, but securing a better rate might even necessitate jumping on a plane, because in most cases banks require the customer to be there in person when they open an account.
Crucially, as all products available on SavingGlobal are offered through banks based in Europe, they all benefit from the EU-wide harmonized deposit insurance scheme. Consequently, savers deposits up to 100,000 per saver per bank, are completely secure.
Partnerships with banks
By partnering with SavingGlobal, banks gain immediate access to savers across Europe (currently the offer is limited to the German residents only) who account for a whopping 8 trillion in deposits.
SavingGlobal currently offers its savers three deposit products from two European bank partners: Bulgarias Fibank and Banco Espírito Santo from Portugal. Both banks are the second largest financial institution in their respective markets and are publicly listed. The company has also recently signed three new agreements with banks from the UK, Norway and Poland to offer their deposit products exclusively to German customers.
From the perspective of banks, we think that this idea has a lot of merit as banks in different countries with different strategies, capital needs, and access to deposits will always want to flex the interest rate they pay on savings accounts to attract more or fewer deposits, said Index Ventures partner Neil Rimer. From the savers standpoint, we love the fact that SavingGlobal gives consumers access to attractive saving products and allows them to decide where to allocate their savings, be it to maximize the interest they receive or simply to show their support as global citizens by providing liquidity to a bank in a different country. And while the value proposition is simple and elegant, there is a lot of complicated plumbing with various banking systems to make it work seamlessly.
Core German market
The Berlin-based startup today announces that it has closed its first significant financing round, bringing the total it has raised to 10 million. The round was led by Index Ventures, a leading global Venture Capital fund whose investments in the financial services sector include The Climate Corporation, Adyen, Auxmoney, Funding Circle, iZettle, Novus and Wealthfront. The firms investment will provide SavingGlobal with greater financial firepower and stability as it enters a phase of rapid growth and development.
The investment will primarily be used to fuel growth in SavingGlobals core German market, the biggest and lowest-yielding savings market in Europe, and for expansion across Europe.
Two high-profile hires will join the companys leadership team. Katharina Lüth, a former Senior Project Manager from McKinsey, will co-lead the companys European expansion and Dr. Philipp Hartmann, who previously worked at Goldman Sachs and Index Ventures, where he focused on fintech investments, will join as VP Product.
We set up SavingGlobal with a clear principle in mind: that we dont believe in borders where the simple savings products are concerned, said Dr. Tamaz Georgadze, CEO and co-founder of SavingGlobal. Were very excited to be teaming up with Index Ventures, a powerhouse investor in disruptive financial services with considerable expertise and a global network of relationships. We are convinced that with their help we can capitalize on a unique opportunity to reshape the European deposit market. As the first and only online platform for European term deposits, our objective is simply to bring the very best European offers to retail savers in Germany and soon in other European countries.