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Germany’s second most precious fintech, Commerce Republic, has vowed to remain personal after doubling its clients and tripling shopper belongings to €100bn within the 12 months to September.
The Berlin-based firm, usually characterised as Europe’s reply to Robinhood due to its low-fee share brokerage enterprise mannequin, has been considered as certainly one of continental Europe’s most promising fintech IPO candidates after receiving a $5.4bn valuation in 2022.
However at the same time as funding bankers hope for a rebound in inventory listings and enterprise capital traders search exits, Commerce Republic co-founder Christian Hecker performed down its prospects for a public market debut in an interview with the Monetary Instances.
“We’re actually not eager about this in any respect — not over the quick time period, not over the medium time period,” Hecker mentioned.
Based in 2015, Commerce Republic began to just accept its first shoppers in 2019. It has since grown to 8mn customers and is now one of many greatest on-line brokers in Germany.
As compared, Comdirect, the online-only arm of Commerzbank based three a long time in the past, has 3mn shoppers and €135bn in shopper deposits, the listed German lender advised the FT.
Hecker mentioned he was assured the corporate might proceed rising a minimum of as quick as its present tempo with out elevating extra funds, with “the majority” of the $1.3bn raised through the previous decade not but spent.
“We’re eyeing so many alternatives to develop in Europe,” Hecker mentioned. Though two-thirds of its clients are presently based mostly in Germany, Commerce Republic is now eyeing France, Italy and different European international locations as key progress markets.
The fintech mentioned it had turned a revenue in 2024 for the second yr in a row, bettering on the €14.1mn it reported for the 12 months to September 2023. Hecker declined to offer a determine, nevertheless, with outcomes as a consequence of be disclosed in public filings at a later date.
Its $5.4bn valuation turned Commerce Republic into Germany’s second most precious fintech after Berlin-based rival N26, in response to Sifted.
However Commerce Republic, which is backed by enterprise capital traders together with Sequoia Capital and Peter Thiel’s Founders Fund, mentioned it had acquired no strain from traders to checklist early as its enterprise capital backers have been taking “a long-term perspective”.
The corporate was strongly criticised by shoppers final yr over delays to dividend funds as a consequence of an IT replace, with its customer support division overwhelmed.
Hecker mentioned that the problems had been “rising pains” brought on by the speedy enlargement that had since been addressed, with the corporate outsourcing the majority of its customer support to permit it to deal with sudden spikes in inquiries.
Commerce Republic additionally faces a looming risk from the ban on so-called fee for order circulation, which comes into power subsequent yr. The fintech presently generates a 3rd of its revenues from the controversial follow, the place market makers pay retail brokers for putting shoppers’ orders with them.
Hecker insisted that Commerce Republic would be capable of modify, partly as a result of it nonetheless had two substantial different income streams, and since he was assured the corporate would be capable of substitute the misplaced revenues from fee for order circulation.
A 3rd of its revenues come from buyer buying and selling charges, and one other third from asset managers paying to promote alternate traded funds to Commerce Republic’s shoppers.
