Fintech Deposit Solutions acquires rival startup, Savedo

Bloomberg

In a sign that dealmaking in the financial-technology sector may be heating up, a German fintech firm has made the rare move of acquiring a startup to beef up its customer base.
Deposit Solutions GmbH, a Hamburg-based company that enables consumers to move their savings around a network of 15 European banks to find the best interest rate, on Monday acquired Savedo GmbH, a Berlin startup in the same field. The terms of the deal, which Deposit Solutions announced in a statement, were not disclosed.
The unusual transaction between the startups comes as banks themselves are circling fintech firms. Lenders and other corporations participated in almost a third of the funding rounds for European financial technology startups in the second quarter, a 31 percent jump from the same period in 2016, according to CB Insights, a New York-based research firm.
In an April report produced by PricewaterhouseCoopers, half the banks surveyed worldwide said they’re planning outright acquisitions of fintech firms. That same month, BNP Paribas SA purchased Compte Nickel, a digital bank in France, for $236 million.
Founded in 2011 by Tim Sievers, an economist and former investment manager, Deposit Solutions is one of a new breed of fintech firms that offer a “deposit marketplace”. It connects savers with lenders throughout the European Union: by using its service, German consumers can move money to a Romanian bank, for instance, that pays a higher interest rate. Lenders such as Deutsche Bank AG can use the company’s software to connect with one another, and utilise the platform to gather deposits without bearing the costs of setting up operations in far-flung markets.
Deposit Solutions, which is backed by billionaire Peter Thiel’s Valar Ventures, says it has “mediated” more than 2 billion euros in savings deposits for 60,000 customers so far. European households have more than 10 trillion euros in savings deposits, says an EU agency.