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Speaker 1: To the fintech space with a particular lens and what's

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Speaker 1: happening in Germany En twenty six the German Challenger Bank,

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Speaker 1: backed by the likes of Peter Teel ten Cent and

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Speaker 1: Lee Kashing. At the end of twenty twenty four, this

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Speaker 1: business reported four point eight million revenue generating customers on

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Speaker 1: its road to recovery. The company, founded in twenty forty,

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Speaker 1: was one of the original banking disruptors, but ran into

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Speaker 1: a major hurdle when German regulator Baffin put a cap

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Speaker 1: on how many new customers it could take due to

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Speaker 1: concerns around money laundering controls. The cap expired last year,

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Speaker 1: and twenty six has since seen a jump in new

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Speaker 1: customers and is forecasting a forty percent revenue rise for

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Speaker 1: this year. Joining us now very pleased to say is

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Speaker 1: Valentine staff and twenty six is CEO and founder Valentine.

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Speaker 1: Good morning, Thank you for joining us. What a turnaround

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Speaker 1: then for the business? Can I be sustained once out

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Speaker 1: of valuation back in twenty twenty one of our nine

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Speaker 1: billion US dollars, When did you get back to that

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Speaker 1: level of valuation? Given the turnaround that you've seen at the.

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Speaker 2: Business, thanks very much for having me. Let's see when

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Speaker 2: we get back to these valuations. I can say that

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Speaker 2: the business has developed very well over the last the

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Speaker 2: last year, actually the last twenty four months already, but

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Speaker 2: we'll see once we grow into the valuation again. I

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Speaker 2: think we've seen big corrections over the last year when

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Speaker 2: it comes to tech valuations, so as founders and we

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Speaker 2: can only focus on focusing on the business KPIs and

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Speaker 2: making the business more sustainable, growing revenue, as you mentioned already,

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Speaker 2: in many more things.

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Speaker 3: In terms of just thinking about the cost of that

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Speaker 3: regulation before we sort of move on and talk about

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Speaker 3: your future plans, how much do you think that cap

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Speaker 3: to growth actually costs you in terms of euros?

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Speaker 2: So I think obviously it cost us to some extent

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Speaker 2: new customers weren't able to grow as fast as possible

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Speaker 2: as we could have seen and as the demand has

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Speaker 2: been from customers. But at the same time, we've been

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Speaker 2: learning a lot. We've been exchanging extremely well with the

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Speaker 2: regulator over the last couple of years, so there's a

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Speaker 2: lot of a big learn part. I think it's very

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Speaker 2: hard to put a number exactly too of what it

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Speaker 2: cost us, but a lot of foregun customers, but now

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Speaker 2: the time for to gain them back or gain them

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Speaker 2: the first time.

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Speaker 1: Is it an example do you think Valentine of overreach

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Speaker 1: by German regulators? Is it a case study and how

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Speaker 1: regulators sometimes overstep at a time and of course when

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Speaker 1: when you is very much focused post Murray Jarigo report

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Speaker 1: on the need to innovate.

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Speaker 2: I mean in Europe in general, I think we are

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Speaker 2: not in a in an area of the world where

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Speaker 2: we have very lose regulation. I think that that is

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Speaker 2: that is a fact. But as a bank we need

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Speaker 2: to deal with that. We're in a highly regulated industry.

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Speaker 2: I think that's a good fact, and I think we

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Speaker 2: we we build the trust with our consumers because the

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Speaker 2: industry is highly regulated, so no one needs to be afraid.

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Speaker 2: At the same time, we also need to work on

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Speaker 2: how we do a more proactive, proactive steering of companies,

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Speaker 2: more proactive regulation, and I think that's definitely a thing

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Speaker 2: to focus over the next year's instead of you know,

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Speaker 2: backward looking regulation, to do more proactive work together with

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Speaker 2: the regulators and shape the regulation for the future.

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Speaker 3: In terms of the competition in this area. Bloomberg reported

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Speaker 3: last week on Revelue it's revenue soaring. I mean, I

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Speaker 3: wonder who you think you know your competitors are Revolute,

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Speaker 3: Wise and so on, But just thinking about Revolute, their

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Speaker 3: customer base reached fifty two point five million people at

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Speaker 3: the end of twenty twenty four, basically more than HSBC.

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Speaker 3: What do you think of that kind of competition. I mean,

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Speaker 3: you're still pretty far behind that. How quickly can you

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Speaker 3: catch up? What do you think about growing your customer

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Speaker 3: base now?

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Speaker 2: I think we are very very focused on the fundamentals.

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Speaker 2: It's not only about the customer number, but we are

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Speaker 2: growing our revenue about thirty forty fifty percent on year.

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Speaker 2: We've done that last year with forty percent growth and

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Speaker 2: revenue just coming out of the growth cup. We expect

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Speaker 2: a similar number this year. We already more than half

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Speaker 2: a billion in revenue year that we will be booking

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Speaker 2: more than that throughout the year. So I think we're

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Speaker 2: on a very very good trajectory. I think the opportunity

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Speaker 2: is even bigger, and I think some of the competition

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Speaker 2: shows that there's even more opportunity we are set to

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Speaker 2: catch up on that. We haven't been able to do

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Speaker 2: that during the growth restrictions. We're there now. But it's

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Speaker 2: not only about the customer number. It's really about the

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Speaker 2: customer engagement. It's how much they do with the account

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Speaker 2: and when it comes to deposits of customer and so on.

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Speaker 2: We actually the leading neobank around the world in terms

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Speaker 2: of number of deposits per customer, transaction volume per customer,

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Speaker 2: and so we have a slightly different position than some of

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Speaker 2: the others. But I think that the market is still big.

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Speaker 2: If you look at at how many of the companies

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Speaker 2: are active in the change banking space in Europe in

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Speaker 2: all markets and real live in twenty four markets, it's

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Speaker 2: not many. It comes down to maybe a couple of

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Speaker 2: a handful of companies. And I think the market is

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Speaker 2: ready for disruption. Is disrupted right now by us and

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Speaker 2: by others, and that will continue over the next the

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Speaker 2: next couple of years.

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Speaker 1: What is the timeframe for sustainable profitability at the business?

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Speaker 2: So we have been starting profitable quarters last year with

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Speaker 2: the third quarter, and we're going to continue that. I

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Speaker 2: think we're going to book a profitable year this year

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Speaker 2: as well. So I think profitability is there and we'll

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Speaker 2: continue over the next years.

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Speaker 3: Resolutes. Thinking about IPO, might you be looking at that.

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Speaker 3: If so when time frame obviously are which is always

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Speaker 3: interested in that.

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Speaker 2: Of course, I think we would have liked to see

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Speaker 2: some of the companies being ready for IPO the last

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Speaker 2: couple of months, to see them list and get some

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Speaker 2: data points in terms of valuation. I mean that the

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Speaker 2: tech industry in general hasn't seen a lot of listings

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Speaker 2: over the last years, and therefore I think it would

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Speaker 2: be good to have the next wave. I think we're

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Speaker 2: not going to be part of this next wave for

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Speaker 2: the next next year, but we're definitely also aiming for

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Speaker 2: going more into an IPO in the next couple of years.

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Speaker 2: So it might be three years from now, might be

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Speaker 2: a little longer, but that's kind of the time frame

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Speaker 2: that we are thinking of.

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Speaker 1: Okay, so maybe a two two to three year time

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Speaker 1: frame for listing publicly, and obviously the caps of markets

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Speaker 1: are challenged on that front right now for all businesses

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Speaker 1: potentially looking to lists. How are you set for funding, Valentine,

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Speaker 1: are you looking to raise? Presumably you're looking to raise

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Speaker 1: again within that time frame.

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Speaker 2: So, as I mentioned, the companies actually from the fundamentals profitable,

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Speaker 2: we are always we have been in the past, and

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Speaker 2: were also in the future. We're always looking for the

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Speaker 2: best setup of investors, but not from a business need,

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Speaker 2: but more from the best capital structure. Currently we're not

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Speaker 2: not raising, but you know, before an IPOs, it's maybe

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Speaker 2: likely that you know, one investor will join, maybe another

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Speaker 2: investor will sell a part. So I think that's more

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Speaker 2: of the transactions that we might see in the in

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Speaker 2: the next couple of years.

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Speaker 3: We're speaking to Valentine self, who is the founder and

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Speaker 3: CEO of N twenty six, the Challenger Bank Neo bank

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Speaker 3: here in Europe. Valentine, I wanted to ask you a question,

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Speaker 3: perhaps left field, but I think very much of interest

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Speaker 3: also to our audience on lending to industrial and military companies.

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Speaker 3: I mean, we've seen Germany talking about reindustrialzation, rearmament. What's

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Speaker 3: your position on that in terms of facilitating that for customers.

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Speaker 2: So I mean today we're not offering accounts to business customers.

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Speaker 2: We've only been starting to do that for small medium businesses,

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Speaker 2: So we're not in the business of really financing big,

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Speaker 2: big product production companies. I think the other players being

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Speaker 2: better situated to do that. But I think we definitely

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Speaker 2: in Europe need to think about that. And need to

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Speaker 2: also help customers to produce goods and the industrial growths

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Speaker 2: to make Europe even stronger and provide a good financing

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Speaker 2: and why we can play a part. We'll also try

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Speaker 2: to play our part in the future.

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Speaker 1: What would you prioritize if you were sitting in government,

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Speaker 1: if you had the leaver's power at your hands, in

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Speaker 1: terms of policies that would support the tech ecosystem of

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Speaker 1: Germany and Europe.

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Speaker 2: I think, first of all, it's increasing life quality, and

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Speaker 2: it's the things that most of the people think about

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Speaker 2: that live in Europe. It's per crass is if you

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Speaker 2: go to to get a new passport, if you you know,

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Speaker 2: want to get a driving license. All these these very

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Speaker 2: simple things that also matter for our employees. And we

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Speaker 2: are employing more than ninety different nationalities and they all

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Speaker 2: come to Germany and they come to Europe. We've also

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Speaker 2: office in Barcelona, and they think, think of, you know,

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Speaker 2: very very good infrastructure of a digital a digital government,

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Speaker 2: and then then they go there and they want to

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Speaker 2: get a driving license and it's it's taking them weeks.

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Speaker 2: I think sometimes they don't even believe it. And I

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Speaker 2: think that's really where we need to start. We need

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Speaker 2: to do the simple things. It's not a question of technology,

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Speaker 2: it's a question of will of using technology and making

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Speaker 2: things much simpler for everybody, not the people that come

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Speaker 2: here to Germany to Europe to work, but also for

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Speaker 2: the people that are already here that are living here,

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Speaker 2: to have a better day to day life. And I

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Speaker 2: think that's the one thing that people should really focus on.

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Speaker 2: And I think digitalization is going to make your much

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Speaker 2: more productive and it's it's the future for us.

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Speaker 3: In terms of the biggest tech backers of companies here

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Speaker 3: in you and yours included Peter Teel amongst your investors.

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Speaker 3: Does the kind of global volatility and markets have you

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Speaker 3: worried about us investors?

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Speaker 2: I think everybody should be kind of worried for the

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Speaker 2: burreers that are created around the world now with the

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Speaker 2: terriffs being considered and all uncertainty that you have is

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Speaker 2: never good for investment, especially long term and everything investors

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Speaker 2: do long term to invest into tech companies, it's normally

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Speaker 2: a journey of five, ten, fifteen, twenty years and you

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Speaker 2: need stability, and I think that's why I think we

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Speaker 2: need to make sure that there is more stability and

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Speaker 2: there's less uncertainty, and I hope that politicians around the

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Speaker 2: world keep that in mind when they take any actions

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Speaker 2: on tariffs, on any other political decisions that might bring

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Speaker 2: harm to consumers over the next years.

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Speaker 1: Just briefly, you haven't picked up the phone to Peter Tail,

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Speaker 1: have you. I mean, he's a key supporter of JD. Van's,

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Speaker 1: the vice President.

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Speaker 2: No, I haven't.

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Speaker 1: Okay, thank you very much,