German digital bank gets backing of billion-dollar venture fund

Digital banking/Bloomberg

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The arrival of companies like Penta, which are known as ‘challenger banks’ and have been offering some of their services for free could put further pressure on margins of conventional banks.

Tuesday 06, August 2019

A Berlin-based fintech is trying to emulate the success that digital banks like N26 have enjoyed with retail customers by specifically targeting business clients, reported Bloomberg.

Penta, which offers bank accounts for firms with up to 70 employees, has just won the backing of HV Holtzbrinck Ventures, one of Europe’s largest venture funds with more than EUR 1 billion ($1,1 billion) under management.

The fintech company—founded in 2017—expects to increase its customer base to about 20,000 by the end of this year from over 8,000 at the moment and plans to expand into Italy in the fourth quarter.

The German corporate-banking market is already highly competitive.

Just this summer, Deutsche Bank started its own digital bank for business customers. It’s called Fyrst and targets companies with fewer than 10 employees. Other in the market include Berlin-based Kontist, which focuses on freelancers, and N26, a company backed by billionaires Peter Thiel and Li Ka-shing that has added a revamped business account to its line-up of retail offerings.

HV Holtzbrinck, which has already invested in firms including Zalando and Delivery Hero, led the EUR 8 million ($9 million) funding round at Penta last month.

Marko Wenthin, Penta’s Chief Executive Officer, said, “This is our biggest round of financing so far.”

Fintech investor Finleap, which counts Chinese insurer Ping An Insurance Group Company among its backers, bought Penta earlier this year and also took part in the latest round of funding.

 

TAGS : digital bank, Penta, Deutsche Bank, HV Holtzbrinck Ventures, Fyrst, Kontist

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