BBVA Acquisition of Holvi – what it means

By Stefan Klestil.

BBVA’s acquisition of Holvi announced today, is remarkable in several ways.

1. To my knowledge, this is the first customer-facing FinTech acquisition by one of the big banks in Europe. There have been many investments into FinTechs by banks often via their in-house accelerators or VCs, there have been partnerships, there have been several tech acquisitions especially in the infrastructure domain but never before has a bank decided to directly take over a customer-facing FinTech brand in Europe.

2. BBVA is far ahead of most banks in executing their digital agenda as witnessed by its M&A and investment activities but also by its CEO and chairman embarking on a radical overhaul of the bank few years back. BBVA has a vision and a team that is attractive and inspiring even for top-notch FinTech founders – a key asset when it comes to actually closing a deal.

3. The deal confirms the attractiveness and growing importance of the prosumer/solopreneur/microenterprise segment. The digital entrepreneurs, or “makers and doers” as Holvi calls its customers are strongly growing across Europe and are in need of digital workbenches and payment and banking infrastructure to easily handle its business and money matters. Traditionally banks have not been able to service this segment profitably. In addition, Basel 3 and further regulation are pushing banks out of lending to this segment altogether. Propositions like Holvi allow access to this segment at low CACs and service costs and with high cross-selling potential especially in lending and FX.

4. The deal in my view marks the starting point of banks using M&A to buy themselves into segment-specific FinTech brands in Europe. FinTechs such as Transferwise, Funding Circle, Number26, Holvi, Nutmeg, Raise, Wikifolio, Revolut, Curve, FinanceFox and Loot are building pan-European or even global brands in specific customer segments and verticals. They are able to acquire and serve customers at a fraction of the cost of financial institutions, enable frictionless onboarding and cross-selling and offer a beautiful smartphone-only experience that millennials have come to expect. And most importantly, they are offering services that cater to the needs of specific segments such as young professionals, expats, millennial entrepreneurs, students and small merchants. As FinTechs grow to dominate these segments banks will have no choice but to acquire these FinTech brands if they don’t want to completely lose access and relevance.

5. FinTechs can survive compliance due diligence of a big bank! The bank exit channel is fundamentally more complex due to heavy regulation in Anti-Money Laundering (AML), Know-Your Customer Procedures (KYC), operating licenses and approval procedures by the regulator. This puts additional heavy burden on the FinTechs to set procedures up in the right way and thoroughly prepare DD towards exit. Unsurprisingly, exit processes take generally a lot longer than in other industries.

Disclosure: Speedinvest has been lead investor into Holvi, and is invested in Wikifolio, Curve and FinanceFox. Stefan Klestil is advisory board member of Number26.

Exit! BBVA übernimmt Holvi

Nächster Exit für Speedinvest: BBVA, global führende Bank im Digitalbereich, übernimmt das finnische FinTech-Startup Holvi

Wien, 07.03.2016; Speedinvest vermeldet seinen sechsten Exit. Die globale Bankengruppe BBVA übernimmt das FinTech Startup Holvi. Speedinvest unterstützte die Onlinebank für Freelancer, Kreative und KMUs in seiner Funktion als Lead-Investor bei der Expansion in die DACH Region.

Speedinvest und Holvi geben heute bekannt, dass das Startup von der globalen Bankengruppe BBVA übernommen und als Teil der BBVA Gruppe integriert wird. Holvi wird als eigenständige Marke und mit eigener, unabhängiger Lizenz weitergeführt. Hauptsitz des Unternehmens bleibt weiterhin Helsinki, Finnland; im Management-Team rund um CEO Johan Lorenzen wird es keine Veränderungen geben. Mit Hilfe von BBVA plant Holvi für 2016 den Roll-Out von weiteren Produkten sowie die Erschließung neuer Märkte. Das Volumen der Transaktion wird nicht veröffentlicht.

Holvi wurde 2011 gegründet, um der von traditionellen Banken vernachlässigten, aber massiv wachsenden Zielgruppe an Selbständigen und FreelancerInnen zu helfen ihre Finanzen besser zu managen. Als eine der ersten pan-europäischen Onlinebanken mit “Value-Add” Features wie einem Spesenabrechnungstool und einem Onlineshop setzte sich das dahinterstehende Team zum Ziel, Finanzen besser verständlich zu machen und Unternehmen in allen dazugehörigen Aspekten zu unterstützen.

Für Holvi ist mit BBVA der perfekte Partner gefunden worden. BBVA ist einer der proaktivsten Player im FinTech Bereich, so wurde bereits 2014 das bekannte US Bankenstartup Simple übernommen, eine Reihe weiterer Investments folgten. 2015 wurde ein eigener Venture Arm aus der Taufe gehoben.

Speedinvest zählt den Bereich FinTech bereits seit drei Jahren zu seinen Kernthemen und verfügt über ein spannendes, stetig wachsendes Portfolio von nun bereits zehn Startups – B2B und B2C – aus ganz Europa. Anfang 2014 investierte der Wiener Fonds in das finnische Unternehmen. Als Teil der Investments stellte Speedinvest ein eigenes lokales Team in Wien zur Verfügung, um den österreichischen und deutschen Markt zu erschließen. Nach Finnland war dies der erste internationale Expansionsschritt, der mit Hilfe des erfahrenen Teams rund um Speedinvest erfolgreich gesetzt werden konnte.

Stefan Klestil, Speedinvest Partner und Investment Manager von Holvi dazu: “Diese Transaktion markiert einen Wendepunkt im Verhältnis von Banken und FinTechs in Europa. Wir glauben, dass Banken sich zukünftig vermehrt über M&A Transaktionen in attraktive Marken in Europa einkaufen werden. Der Deal bestätigt ebenfalls die Attraktivität der Zielgruppe von Holvi – Prosumer, Solopreneurs und Microentrepreneurs. BBVA setzt mit dieser Transaktion einen weiteren Meilenstein in der Umsetzung ihrer digitalen Agenda.”

Michael Breidenbrücker: Mr. Startup

Michael founded his first startup before even knowing what a startup was. 16 years later, he shares his wisdom with young entrepreneurs and big corporations.

His colleagues charmingly refer to him as Mr. Startup, but Michael Breidenbrücker didn’t even know he founded a startup when he launched Last.fm in 2000: “They didn’t call it startup back then.” Michael grew up in Vorarlberg and moved to London for his studies in 1998. He recognized the need for a platform that helps to find the right music at the right time. Long before MySpace, iTunes and Spotify, Last.fm was born – a music streaming service which kick-started the music recommendation space and was a main player in the web2.0 movement. Last.fm was sold to CBS in 2007 but Michael insists that he didn’t set out to be a CEO, but eventually ended up in that position from 2002 until 2005.

“As startup CEO, you’re basically the janitor. You’re doing everything”, the early founder says now. He refuses to romanticize the business of startups, and that is what Michael brings to the table at Speedinvest. Oliver Holle approached Michael, who also founded another music startup called RJDJ and more recently turned to angel-investing. In 2011, the serial entrepreneur decided to join the VC firm’s Investment commitee and in 2014 he joined as a partner: “We realized that we were working on the same things, so we decided to join forces”, Michael recalls.

Having been through the highs and lows of building a company more than once, “Mr. Startup” is sharing his experiences as entrepreneur with young founder teams. Growth Hacking, Product development, Team building and management are Michaels areas of expertise Ultimatively e’s helping to build products and turn them into successful businesses.

Besides his investments and work with portfolio companies, Michael’s other responsibility at Speedinvest is to run Speedstartstudio, a so-called excubator. At Speedstartstudio, the VC works together with corporates to build startups and new products from scratch. “In the past, corporates were perceived as exit partners. But more recently, a lot of them are turning into sparring partners“, the head of Speedstartstudio explains. “We are seeing a lot of non digital markets opening up to the digitalisation and if we want to have a presence in these new digital markets we need industry specific know-how which we can only get in collaboration with corporates” Michael insists that startup is the perfect management method to conquer new markets fast.

For Michael, having a startup is not a job, “it’s a lifestyle“. Thus, he doesn’t see himself as a classic investor or Venture Capitalist. Almost 16 years after founding his first company, Michael still can very much relate to the struggles of young founders while also understanding the demands of corporations.