Speaker 1: To the fintech space with a particular lens and what's
Speaker 1: happening in Germany En twenty six the German Challenger Bank,
Speaker 1: backed by the likes of Peter Teel ten Cent and
Speaker 1: Lee Kashing. At the end of twenty twenty four, this
Speaker 1: business reported four point eight million revenue generating customers on
Speaker 1: its road to recovery. The company, founded in twenty forty,
Speaker 1: was one of the original banking disruptors, but ran into
Speaker 1: a major hurdle when German regulator Baffin put a cap
Speaker 1: on how many new customers it could take due to
Speaker 1: concerns around money laundering controls. The cap expired last year,
Speaker 1: and twenty six has since seen a jump in new
Speaker 1: customers and is forecasting a forty percent revenue rise for
Speaker 1: this year. Joining us now very pleased to say is
Speaker 1: Valentine staff and twenty six is CEO and founder Valentine.
Speaker 1: Good morning, Thank you for joining us. What a turnaround
Speaker 1: then for the business? Can I be sustained once out
Speaker 1: of valuation back in twenty twenty one of our nine
Speaker 1: billion US dollars, When did you get back to that
Speaker 1: level of valuation? Given the turnaround that you've seen at the.
Speaker 2: Business, thanks very much for having me. Let's see when
Speaker 2: we get back to these valuations. I can say that
Speaker 2: the business has developed very well over the last the
Speaker 2: last year, actually the last twenty four months already, but
Speaker 2: we'll see once we grow into the valuation again. I
Speaker 2: think we've seen big corrections over the last year when
Speaker 2: it comes to tech valuations, so as founders and we
Speaker 2: can only focus on focusing on the business KPIs and
Speaker 2: making the business more sustainable, growing revenue, as you mentioned already,
Speaker 2: in many more things.
Speaker 3: In terms of just thinking about the cost of that
Speaker 3: regulation before we sort of move on and talk about
Speaker 3: your future plans, how much do you think that cap
Speaker 3: to growth actually costs you in terms of euros?
Speaker 2: So I think obviously it cost us to some extent
Speaker 2: new customers weren't able to grow as fast as possible
Speaker 2: as we could have seen and as the demand has
Speaker 2: been from customers. But at the same time, we've been
Speaker 2: learning a lot. We've been exchanging extremely well with the
Speaker 2: regulator over the last couple of years, so there's a
Speaker 2: lot of a big learn part. I think it's very
Speaker 2: hard to put a number exactly too of what it
Speaker 2: cost us, but a lot of foregun customers, but now
Speaker 2: the time for to gain them back or gain them
Speaker 2: the first time.
Speaker 1: Is it an example do you think Valentine of overreach
Speaker 1: by German regulators? Is it a case study and how
Speaker 1: regulators sometimes overstep at a time and of course when
Speaker 1: when you is very much focused post Murray Jarigo report
Speaker 1: on the need to innovate.
Speaker 2: I mean in Europe in general, I think we are
Speaker 2: not in a in an area of the world where
Speaker 2: we have very lose regulation. I think that that is
Speaker 2: that is a fact. But as a bank we need
Speaker 2: to deal with that. We're in a highly regulated industry.
Speaker 2: I think that's a good fact, and I think we
Speaker 2: we we build the trust with our consumers because the
Speaker 2: industry is highly regulated, so no one needs to be afraid.
Speaker 2: At the same time, we also need to work on
Speaker 2: how we do a more proactive, proactive steering of companies,
Speaker 2: more proactive regulation, and I think that's definitely a thing
Speaker 2: to focus over the next year's instead of you know,
Speaker 2: backward looking regulation, to do more proactive work together with
Speaker 2: the regulators and shape the regulation for the future.
Speaker 3: In terms of the competition in this area. Bloomberg reported
Speaker 3: last week on Revelue it's revenue soaring. I mean, I
Speaker 3: wonder who you think you know your competitors are Revolute,
Speaker 3: Wise and so on, But just thinking about Revolute, their
Speaker 3: customer base reached fifty two point five million people at
Speaker 3: the end of twenty twenty four, basically more than HSBC.
Speaker 3: What do you think of that kind of competition. I mean,
Speaker 3: you're still pretty far behind that. How quickly can you
Speaker 3: catch up? What do you think about growing your customer
Speaker 3: base now?
Speaker 2: I think we are very very focused on the fundamentals.
Speaker 2: It's not only about the customer number, but we are
Speaker 2: growing our revenue about thirty forty fifty percent on year.
Speaker 2: We've done that last year with forty percent growth and
Speaker 2: revenue just coming out of the growth cup. We expect
Speaker 2: a similar number this year. We already more than half
Speaker 2: a billion in revenue year that we will be booking
Speaker 2: more than that throughout the year. So I think we're
Speaker 2: on a very very good trajectory. I think the opportunity
Speaker 2: is even bigger, and I think some of the competition
Speaker 2: shows that there's even more opportunity we are set to
Speaker 2: catch up on that. We haven't been able to do
Speaker 2: that during the growth restrictions. We're there now. But it's
Speaker 2: not only about the customer number. It's really about the
Speaker 2: customer engagement. It's how much they do with the account
Speaker 2: and when it comes to deposits of customer and so on.
Speaker 2: We actually the leading neobank around the world in terms
Speaker 2: of number of deposits per customer, transaction volume per customer,
Speaker 2: and so we have a slightly different position than some of
Speaker 2: the others. But I think that the market is still big.
Speaker 2: If you look at at how many of the companies
Speaker 2: are active in the change banking space in Europe in
Speaker 2: all markets and real live in twenty four markets, it's
Speaker 2: not many. It comes down to maybe a couple of
Speaker 2: a handful of companies. And I think the market is
Speaker 2: ready for disruption. Is disrupted right now by us and
Speaker 2: by others, and that will continue over the next the
Speaker 2: next couple of years.
Speaker 1: What is the timeframe for sustainable profitability at the business?
Speaker 2: So we have been starting profitable quarters last year with
Speaker 2: the third quarter, and we're going to continue that. I
Speaker 2: think we're going to book a profitable year this year
Speaker 2: as well. So I think profitability is there and we'll
Speaker 2: continue over the next years.
Speaker 3: Resolutes. Thinking about IPO, might you be looking at that.
Speaker 3: If so when time frame obviously are which is always
Speaker 3: interested in that.
Speaker 2: Of course, I think we would have liked to see
Speaker 2: some of the companies being ready for IPO the last
Speaker 2: couple of months, to see them list and get some
Speaker 2: data points in terms of valuation. I mean that the
Speaker 2: tech industry in general hasn't seen a lot of listings
Speaker 2: over the last years, and therefore I think it would
Speaker 2: be good to have the next wave. I think we're
Speaker 2: not going to be part of this next wave for
Speaker 2: the next next year, but we're definitely also aiming for
Speaker 2: going more into an IPO in the next couple of years.
Speaker 2: So it might be three years from now, might be
Speaker 2: a little longer, but that's kind of the time frame
Speaker 2: that we are thinking of.
Speaker 1: Okay, so maybe a two two to three year time
Speaker 1: frame for listing publicly, and obviously the caps of markets
Speaker 1: are challenged on that front right now for all businesses
Speaker 1: potentially looking to lists. How are you set for funding, Valentine,
Speaker 1: are you looking to raise? Presumably you're looking to raise
Speaker 1: again within that time frame.
Speaker 2: So, as I mentioned, the companies actually from the fundamentals profitable,
Speaker 2: we are always we have been in the past, and
Speaker 2: were also in the future. We're always looking for the
Speaker 2: best setup of investors, but not from a business need,
Speaker 2: but more from the best capital structure. Currently we're not
Speaker 2: not raising, but you know, before an IPOs, it's maybe
Speaker 2: likely that you know, one investor will join, maybe another
Speaker 2: investor will sell a part. So I think that's more
Speaker 2: of the transactions that we might see in the in
Speaker 2: the next couple of years.
Speaker 3: We're speaking to Valentine self, who is the founder and
Speaker 3: CEO of N twenty six, the Challenger Bank Neo bank
Speaker 3: here in Europe. Valentine, I wanted to ask you a question,
Speaker 3: perhaps left field, but I think very much of interest
Speaker 3: also to our audience on lending to industrial and military companies.
Speaker 3: I mean, we've seen Germany talking about reindustrialzation, rearmament. What's
Speaker 3: your position on that in terms of facilitating that for customers.
Speaker 2: So I mean today we're not offering accounts to business customers.
Speaker 2: We've only been starting to do that for small medium businesses,
Speaker 2: So we're not in the business of really financing big,
Speaker 2: big product production companies. I think the other players being
Speaker 2: better situated to do that. But I think we definitely
Speaker 2: in Europe need to think about that. And need to
Speaker 2: also help customers to produce goods and the industrial growths
Speaker 2: to make Europe even stronger and provide a good financing
Speaker 2: and why we can play a part. We'll also try
Speaker 2: to play our part in the future.
Speaker 1: What would you prioritize if you were sitting in government,
Speaker 1: if you had the leaver's power at your hands, in
Speaker 1: terms of policies that would support the tech ecosystem of
Speaker 1: Germany and Europe.
Speaker 2: I think, first of all, it's increasing life quality, and
Speaker 2: it's the things that most of the people think about
Speaker 2: that live in Europe. It's per crass is if you
Speaker 2: go to to get a new passport, if you you know,
Speaker 2: want to get a driving license. All these these very
Speaker 2: simple things that also matter for our employees. And we
Speaker 2: are employing more than ninety different nationalities and they all
Speaker 2: come to Germany and they come to Europe. We've also
Speaker 2: office in Barcelona, and they think, think of, you know,
Speaker 2: very very good infrastructure of a digital a digital government,
Speaker 2: and then then they go there and they want to
Speaker 2: get a driving license and it's it's taking them weeks.
Speaker 2: I think sometimes they don't even believe it. And I
Speaker 2: think that's really where we need to start. We need
Speaker 2: to do the simple things. It's not a question of technology,
Speaker 2: it's a question of will of using technology and making
Speaker 2: things much simpler for everybody, not the people that come
Speaker 2: here to Germany to Europe to work, but also for
Speaker 2: the people that are already here that are living here,
Speaker 2: to have a better day to day life. And I
Speaker 2: think that's the one thing that people should really focus on.
Speaker 2: And I think digitalization is going to make your much
Speaker 2: more productive and it's it's the future for us.
Speaker 3: In terms of the biggest tech backers of companies here
Speaker 3: in you and yours included Peter Teel amongst your investors.
Speaker 3: Does the kind of global volatility and markets have you
Speaker 3: worried about us investors?
Speaker 2: I think everybody should be kind of worried for the
Speaker 2: burreers that are created around the world now with the
Speaker 2: terriffs being considered and all uncertainty that you have is
Speaker 2: never good for investment, especially long term and everything investors
Speaker 2: do long term to invest into tech companies, it's normally
Speaker 2: a journey of five, ten, fifteen, twenty years and you
Speaker 2: need stability, and I think that's why I think we
Speaker 2: need to make sure that there is more stability and
Speaker 2: there's less uncertainty, and I hope that politicians around the
Speaker 2: world keep that in mind when they take any actions
Speaker 2: on tariffs, on any other political decisions that might bring
Speaker 2: harm to consumers over the next years.
Speaker 1: Just briefly, you haven't picked up the phone to Peter Tail,
Speaker 1: have you. I mean, he's a key supporter of JD. Van's,
Speaker 1: the vice President.
Speaker 2: No, I haven't.
Speaker 1: Okay, thank you very much,