Finbites #23: SeedBlink prepares to take off | Why neobanks don't make enough profits
"We don't buy customers; they genuinely want the account." Is this the secret of profitability?
SeedBlink plans a €3 million series A to become the next-gen investment platform for tech startups
35 campaigns, 12.4 million euros in total investments (6.7 million EUR raised through equity crowdfunding), over 4,000 investors from 12 countries! These are the numbers that marked SeedBlink’s success in Romania. Now the Romanian crowdfunding platform is ready to take over the whole region.
Seedblink operates with a 6-7% success fee that startups pay from the total amount raised through crowdfunding, said Andrei Dudoiu, one of the co-founders.
He expects to close the series A round in the summer and says in an interview for Future Banking that individual investors could also participate in the next funding round.
Seedblink was launched in December 2019 by former bankers Andrei Dudoiu and Ionuț Pătrăhău. Early last year, Radu Georgescu and Carmen Sebe joined as partners (photo with all the partners), and the team managed to facilitate 26 out of 54 financing rounds of the Romanian startups in 2020.
Find out more details in the Future Banking interview.
Anne Boden: "We don't buy customers; they genuinely want the account."
Anne Boden, the CEO of Starling Bank, had some interesting remarks in an interview with Ronit Ghose at Citi's 8th Annual Digital Money Symposium.
She shed some light on the ingredients a neobank needs to gain profitability and become a primary bank, not the choice for coffee shops or travel expenses.
Starling was a bank from day one and didn't have a prepaid proposition as other neobanks did, so the customers treated Starling as a primary bank.
Also, Starling benefited from a more mature customer base and grew less dependant on international travel or coffee shop transactions.
Here are some talking points from the video that led me to draw some conclusions on why other neobanks didn't make enough profits:
they don't have the right customers; kids in their twenties that use the account on low-value transactions won't make you profitable
it's nice to be a secondary bank, but the average balances will count in the end, and you have to rely on affluent customers
they don't have a solid lending business; while interchange fees may add up, during Covid, these revenues took a hit
I would say that the big secret of Starling is thinking like a bank but acting like a Fintech. It has affluent clients, a diverse income structure (including a bank as a service revenue stream), and doesn't pursue customers for the sake of showing some numbers.
Actually, Boden had a stingy remark on referrals programs that are very popular among other fintechs. She disagrees with strategies like paying 5 pounds to recommend the bank to a friend, expecting organic growth instead.
Open Banking in Romania: 0 local licensed TPPs, 54 passported from EU
According to Salt Edge, Romania has no registered TPPs by the National Bank, but 54 companies have passported their EU license.
Considering that Romania was among the last countries in the EU to adopt the PSD2 regulation, Salt Edge thinks the country is still gaining momentum.
The startup with offices in Ottawa, London, and Chisinau announced that it had connected 15 banks from Romania to its open banking gateway.
Choose your next innovation masterclass, delivered to you by Mike Parsons
Take the survey, choose your next masterclass and register to Future Banking.
Mike Parsons has an interesting journey, to say the least. After seven weeks at the university, he decided to pursue his dreams, and not a diploma. He launched Australia's first internet radio station, claimed a Guinness Book Record, and sold his Silicon Valley Startup.
Mike also spent a lot of time in advertising, where he won global awards like DA&D Pencils, Cannes Lion's, Effie's, and even a TED award.
Now he's currently the Chief Executive Officer of Qualitance. Together with over 200 staff, he helps clients build future growth products - from banks in Europe to Ford Motors in Australia and Anastasia Beverly Hills in the USA.
You can easily pick his brain - for FREE - by listening to the Moonshots Podcast or take the BottomUp courses.
How fast is the digital lending process in SEE? Here's what TBI Bank has to say
The digital loan solution developed by TBI Bank for clients in Romania or Bulgaria is as fast as similar solutions used by banks from United States, Great Britain, or Germany and allow the SEE bank to disburse loans with no human interaction in a couple of minutes, said Petr Baron, CEO of TBIF (TBI Bank) for Future Banking.
In fact, he stated that TBI, a bank for which Bulgaria and Romania are key markets, is using technologies that Goldman Sachs also employs to open the relationship with Apple cardholders.
Due to biometrics and KYC technologies, the customers can get a product loan directly from the online store and wait for approval of the credit while running the shopping cart checkout.
Petr (photo) explained that a recurring customer could receive approval even in 20 seconds, while the waiting time could be longer for new clients. The total time until the purchased product is financed depends on the Fiscal Authority database's verification, but the average is around 2-3 minutes.
Fintech specialist advise startups to show “patience and humbleness when working with banks”
To be surrounded by as many entrepreneurs and leaders as possible, and be patient when working with banks: this is some of the advice given by the representatives of some of the most important specialists in the investment and fintech industry during the online event NEXT FinTech – The Bridge to Inclusive Finance.
I believe that building a fintech without the experience of working with banks is very difficult. If you don't know how to deal with the banks, even if you have the best product in the market, the system can reject you. Some founders are not so patient with the way banks are dealing with things; in banking, weeks are like seconds or seconds are like weeks. The time is very different, said Cosmin Cosma, president of RoFin.Tech, and founder of Finqware, at the NEXT Fintech Demo Day event.
Find out more advice from NEXT Fintech experts HERE.
How can you train creative thinking? Start with "One + One = Three!"
For years I thought that creativity is an innate trait. You either have it, or you don't. Till I discovered Dave Trott and read or listened to 4 of his books.
Winston Churchill summarized creativity in a quote: "We have no money, we shall have to think." So, creative thinking is finding new ways to solve a problem with limited resources.
But how do you do creative thinking?
Steve Jobs said that any new idea is nothing more than a new combination of old elements. And creative thinking is the ability to see combinations between the old elements.
Those who do that are good because they have more experiences or thought more of that experiences than other people.
Read an example of pure creativity from Dave's book in my blog post.
Monese has a new Home Screen! Would you care to personalize your screen?
Starting this month, Monese introduced a new feature. It seems like an obvious thing to do for a Fintech, but it’s not an evident choice for traditional banks.
I know that we should be able to customize our home screens, to see our financial lives at a glance and better manage our money.
But these in-app CX improvements are not (yet) a priority for a lot of banks.
Moving or removing widgets in the mobile banking app is kind of mandatory for me because lots of banking apps became packed with useless features.
I tend to use 20-30% of the features, so I’d be happy to see just those widgets on my home screen.
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Did you rethink the onboarding process of your HR department?
Join us at the next Future Banking meetup, on March 30, and find out what has changed in Human Resources in the last year and how the industry copes with the remote onboarding and the work from home environment.
Richard de Graaf, Head of HR at ING Bank Romania, will approach topics like the learning culture, the six capabilities that help employees keep their skills relevant and up to date or soon to be launched onboarding mobile app.
Adina Pintea, co-founder of 4mind Benefits, will talk about mental health and wellbeing at the workplace. With insights from their 4mind employee benefits subscription, Adina saw organizations' efforts to build resilience and create the right conditions for their employees, to reduce the symptoms of stress, anxiety, and depression, overcome personal issues and achieve an optimal emotional balance.
Have you missed the last Future Banking meetup?
Now you can watch the full debate about social media and marketing strategies on YouTube. 👇
Jobs in Fintech & startups
The equity crowdfunding platform SeedBlink needs a Product Manager
Roboself, a conversational AI platform, wants a business development co-founder
UiPath looks for a Product Manager Intern at the Bucharest Office
Are you looking for some growth hacking tactics for hiring in the competitive Fintech landscape?
Here’s News Hijacking by the book.
Georg Hauer, general manager with N26, had a thoughtful message for the 350 ING Austria employees affected by the layoffs in Vienna due to the closing of ING’s retail business.
Other worth mentioning Finbites
Raiffeisen Bank Bulgaria announced it started testing a use-case with PayByFace, a Romanian Fintech that enables facial recognition payments. The pilot launched in Sofia at a bistro within Raiffeisen's headquarter is part of the Visa Innovation Program that encourages new payment methods and fintech innovations in the region.
The Fintech powerhouse has over 230 fintech companies operating in the country, 118 fully passportable Fintech licenses issued, and 4,000+ people employed in the sector. What's more interesting considering last year: 87% of the Fintechs surveyed saw their revenue increase in 2020, and over a third saw their revenue double.
TBI Bank, one of the fast-growing phygital lenders in the South-Eastern European region, with core markets in Bulgaria, Romania, and banking operations in Germany, Sweden, Denmark, and Poland, enters the Lithuanian market.
The Romanian startup announced a new strategic partnership to tap into the Asian technology market. Mobinology teams up with Druid to enable AI-driven conversational capabilities in large digital transformation projects across the APAC region.
Steven van Groningen: "In these unusual circumstances, we managed to increase the loan portfolio by 5%, achieve a loan/deposit ratio of 66% and a return on capital (RoE) of 14%."
Our partners from Trending Topics SEE looked behind the numbers of IT sales in Bulgaria. Find out in their article how Bulgaria's IT industry got through the COVID-19 pandemic and Brexit challenges in 2020
Mastercard announced for business card users a "Digital package" that includes discounts for software, hardware, electronic signature solutions, or healthcare packages for business owners.If you haven't subscribed yet, now is the best time to do it. Sign up now, and don't miss the next Finbites newsletter.
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