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CommerzVentures: when fintech startups succeed, banks can also win

Tim Green

You'd be surprised how much 'co-opetition' there is between the classic banks and new entrepreneurs, says the head of CommerzBank's investment arm.

The usual narrative around the fintech space is one of agile startups stealing business from lumbering ‘traditional’ banks.

But like most generalisations, it’s not strictly true.

Well, not according to Germany’s Commerzbank. It launched its own incubator, CommerzVentures, in 2014 to make strategic investments in fintech startups at the seed stage.

The division has a remit to find investable firms all over the world.

CommerzVentures’ co-managing director Stefan Tirtey believes, in most cases, banks and fintech startups need each other.

He says: “Take short term lenders. In one sense they are competing with banks for SMB lending, but they also need the backs to finance their loan books…It’s not a zero sum game, it’s incremental to what the banks are doing. In many cases, it’s increasing the size of the pie not necessarily taking market share away.”

Tirtey expanded on this theme in this exclusive video interview with Hot Topics.

He also discussed the explosion of ideas and activity in the fintech startup space in general, confirming that CommerzVentures has met around 250 founders in six months.

“The deal flow is good,” he says. “So far, it mostly originates from London and Germany. But fintech startups are everywhere. In time we expect to see more companies from the Benelux countries, France, the Nordics, Singapore and Israel.”

Of course, competition to fund the best of them is fierce among investors. And not just from US funds.

Here Tirtey rejects another received wisdom – that European investors are risk averse.

He says: “There’s been a lot of talk about there not being enough money around in Europe – and that companies have to look to the US for growth financing.

“I’ve always found that for the best companies, there has always been competition. Look at Klarna and Wonga: investors were all over them. They had plenty of offers from European funds. So for the best fintech startups, absolutely the competition is high.”