“It’s not London-versus-Berlin we should be afraid of in fintech” – Finleap co-founder

finleap ramin

Now two years old, Finleap is a company builder based in Berlin. It’s a similar model to European startup studios like Founders in Copenhagen and Betaworks in New York, but is different in that it focuses exclusively on financial tech companies.

The idea is that Finleap provides funding (up to €5m seed), talent, network and resources ranging from legal services to engineering and marketing as a platform to help build scalable businesses at speed. Finleap now employs 250 people and its portfolio businesses include lending service BillFront and investments marketplace Savedo as well as Solaris Bank, which just got its full license in Germany.

At the Tech Open Air conference in Berlin last week, we sat down with Finleap co-founder and managing partner, Ramin Niroumand, to talk about why the studio model suits financial technology businesses, Berlin’s fintech scene and what the future of finance will look like.

Why did you decide to create Finleap?

We didn’t call it fintech back when I started, but I’ve always worked in financial services technology. What I learned through helping banks with tech issues was that that the impact you can make in this sector with new business models is not something you can achieve in a traditional startup environment. It’s about having the entrepreneurial mindset combined with the freedom of a startup.

Why does the startup studio model suit fintech companies?

Compared to other digital industries like e-commerce or food delivery fintech is much more complex and heavily regulated, which means you need more core competencies on the team. The idea was was for us to hire smart people with expertise in legal, marketing and product development and then share those skills across several companies, turning Finleap into a launch pad for startups. We can then create individual companies with co-founder chiefs and combine an entrepreneurial mindset with industry know-how and technology.

A friend of mine started a mobile advertising company a few years ago and at that time there were no experts you could buy from the market because the market was so new. You needed very smart, very technology-driven people to drive that. In banking it’s a little bit different because banking has been around for ages so the expertise is there, but in this case it’s about changing the mindset.


What do you make of the ‘banks versus fintech’ conversation?

It is a revolution but it is more of a cooperative revolution. When I worked in a bank DKB, the largest internet bank in Germany, we were looking at payments solutions and I thought even though we’re big, even if we have the money, does it make sense to invent a new payment system that may not even be used? Instead we went to Paypal and Sofort and integrated them into our bank and now the bank is making more revenue using existing payment methods the customer already likes. It’s the same at Finleap, we always work with industry.

I don’t really get that game of fintech versus banks – we are all playing in the same market.

What impact will Brexit have on Berlin’s fintech scene?

Berlin was great before, but maybe now post Brexit it’s accelerating a bit. Given the importance of stability in finance, the only thing we can be certain of post Brexit is uncertainty and insecurity, so now more people are looking at moving to Berlin.

What are the specific advantages of being based in Berlin?

Germany is the largest market in Europe. Berlin is the capital of Germany, it is stable – probably the most stable city in Europe – and we already have good tech talent plus affordable living conditions so the city is attractive for building businesses.

But actually what banks and the rest of us should be afraid of isn’t ‘London versus Berlin’ and so on, but rather the US or the Chinese coming into Europe. Look at the payment sector for example, which is already very technology driven: we already lost that game to the Americans, just like we’ve already lost the consumer tech part to them. When it comes to other banking products we still have a chance if we can develop tech quickly on a scalable platform. Maybe something unsexy like data privacy could be a competitive advantage.

Berlin has proved itself strong in tech, but what about finance?

The financial capital of Germany is definitely Frankfurt, or even Munich or Dusseldorf when it comes to big financial institutions. But you need the right mixture of people as well. You need entrepreneurs, which we have here, as well as industry know-how.

We have bankers here too. But to build innovative models outside large corporations you need to be ready to change something. The people we get in Berlin are ready for change: the way they live, their salary packet, and their willingness to work with people 20 years younger than them.

Brelin graf

What would make Berlin a better place to build tech?

What is really tough is if you want to set up a fund and collect equity. Even we, a professional organisation, would need 12 months to set up a fund. If you want to set up a business in Germany you know you go and set up a GmbH and you know what to do. There needs to be a go-to structure for fund investments.

It’s not that we want to burn capital, but the lack of it constrains the speed at which we can build. We can’t afford to wait – I just heard a Chinese company say if we want to enter Europe we’ll just buy Barclays, DB and something from Spain – that’s where they are coming from.

What have you learned building Finleap?

One learning is that fintech takes time – complexity takes time, but that should not be in your mind all the time. Speed should be the mindset.

The thing we did right from the beginning was stick to principles. We have three; have the right mixture of people – do not just have the technologist and forget the industry expert. The other is venture first: the co-founders really make the decisions, I do not make strategic calls in the ventures. The third thing is 80:20 – make mistakes but not when it comes to regulation. If one company blows up the system, it affects all the others and that is something we can’t afford.

What did you make of Powa Technologies in the UK?

It was an isolated case but it doesn’t help. Then again look at how much banks mess up.

What are you most excited about in financial tech right now?

At its heart financial services is the coolest industry to be in because it enables all other industries. If in the future you can consume financial services but without knowing you are consuming a financial product, that is the dream.

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