HomeGermany-StartupsInterview with Tamaz Georgadze - CEO and co-founder of one of Europe's...

Interview with Tamaz Georgadze – CEO and co-founder of one of Europe’s fastest-growing FinTech startups

Raisin is currently one of the fastest-growing FinTech startups in Europe. Under the brands WeltSparen and Raisin, the young company offers an online marketplace for deposit products of partner banks in the European Economic Area since 2013. The Raisin platform is available across Europe in English and localized platforms exist for Germany, France, Spain, and Austria. One week ago the Berlin-based company announced a €30 million Series C funding round which brought the total amount raised to date to €60 million. We recently had the chance to do an interview with Tamaz Georgadze, the co-founder & CEO of Raisin. Here it is:

To kick this off, could you please give us a brief introduction about yourself and tell us where are you coming from?

My name is Tamaz Georgadze. I come from Georgia which when I was born was still part of the USSR. I now live and work in Germany, where I arrived when I was 16 to learn German and write my dissertation in economics. Upon completing my PhD, I worked at McKinsey & Co. for 9 years – the last few years as principal. I mainly served clients in the financial services industry across Europe and beyond.

Where did you meet the other founders and where did the idea for Raisin come from?

I founded Raisin in 2012, together with two former colleagues from McKinsey, where I worked as a consultant around one decade. The background of this company goes back to 2008, when I saw a real surge in interest of banks in gathering retail deposits. Wholesale funding had dried up pretty quickly as a result of the financial crisis. Furthermore, as a Georgian national, I had colleagues in Germany privately asking me if I could help them open high-yielding Euro and U.S. dollar savings accounts in Georgia. I did this, helping with KYC, carrying documents from Germany to Georgia and understood on a personal level how hard opening bank deposits across borders can be. These factors inspired me to create a platform that would blend cross-border horizons with the simplicity of an online platform. It was an innovative proposition: A marketplace that consolidates savings deposit accounts across banking providers and integrates them into one interface. A one-stop-shop solution for regular savers.

How long it took for the implementation of your idea?

Raisin GmbH was founded towards the end of 2012. However, it took us a year to get the platform to go live. The legal implications of our platform were far-reaching and our business model was groundbreaking. This required quite some alignment with regulators and financial law experts to comply with financial, privacy and data security regulations. In addition, this compliance required substantial amounts of technical work.

The idea of having a European deposit marketplace is something extremely interesting. Could you explain us how it works in practice?

Europe has a common market and a common currency, but it still lacks a common financial market. Savers in certain countries obtain lower interest rates than in other countries. We allow savers anywhere in Europe to obtain higher interest on their deposits regardless of where they reside by providing them access to savings products from banks across the EU. We provide a very straightforward and fully-online account opening process as well as a one-stop solution to managing multiple savings accounts. Our service is transparent and there are no hidden fees for our customers.

The reception of our service has been very encouraging: Over 60,000 customers have deposited more than EUR 2 billion in our 27 partner banks from 15 European countries. These numbers are rapidly growing as more people realize they do not have to settle for near-zero or negative returns on their term deposits. The national EU-mandated deposit guarantee schemes safeguarding deposits up to EUR 100,000 per customer per bank give customers the security and comfort of knowing their savings are safe.

What do you see next for deposit investing?

Our brand reputation and recognition enables us to deepen our offering in terms of bank and term-deposit offerings. In addition, we can broaden our portfolio of savings products to serve more customers with additional savings and investment products. These products should be relatively simple so that our offering continues to be transparent and comparable across providers.

In addition, we are in the process of launching distribution partnerships with traditional banks to enable financial advisors to provide Raisin savings products to their customers, thus enabling them to secure better returns on their deposits. These distribution partners would potentially enable millions of European savers to access Raisin offerings via the online banking system of their existing banks.

How have you been able to grow the transactions on your platform from zero to more than €2 billions? That’s an impressive investments milestone.

Since we launched our platform we have continuously sought to broaden Raisin’s offer by making sure that Raisin customers have access to consistently attractive interest rates. In addition, we have sought to increase our brand awareness by highlighting the novelty and quality of our service to a broad public. We use a broad range of marketing channels including both digital and traditional media and coverage garnered from important media such as The Economist, the Wall Street Journal and the Financial Times Our efforts have resulted in Raisin having the highest brand recognition of any fintech company in German-speaking markets. Thirdly, we have expanded our geographic coverage by opening localized platforms for Austria (weltsparen.at), France (raisin.fr), Spain (raisin.es) and English-speaking Europe (raisin.com). Soon, we will also open a platform for the Italian market.

With Raisin you already got more than €30 million in investments from top tiers VCs. Any suggestions that you can share with founders looking to raise funding?

We have actually raised over €60 million! The 26th of January we announced a series C round of funding that raised an additional €30 million from investors including US-based Thrive Capital and with the participation of Raisin’s existing investors – Palo Alto-based Ribbit Capital and Index Ventures.

If there is one piece of advice I recommend potential founders to treasure is to get the first round of funding right and clean. To skimp on legal fees or to settle for mediocre conditions is more harmful than most founders realize. We also always avoided rewarding our investors for non-investment contributions as this is exactly what founders should expect from early / Angel investors for free. Successive funding round negotiations will be based on the terms signed in the first round. So if one settles for poor terms in the first round, it is almost inevitable that all successive rounds will be affected.

I found that one of the peculiarities of Germany is to have a highly-decentralized Fintech ecosystem. Berlin is a big tech hub, but Hamburg, Munich and Frankfurt also play an important role. Do you see this as an issue or a strength for the development of the German Fintech industry?

Decentralization is a feature of German business life. In Germany, the automotive sector is decentralized with hubs in different cities of different regions such as Wolfsburg, Stuttgart, Munich. The German fintech sector also reflects this diversity. Given that cities such as Hamburg, Munich, Frankfurt and Berlin each have distinct strengths in terms of the capital, infrastructure and talent they can draw on, it is understandable that Germany does not have one single fintech center, as one might say is the case in France or in the UK.

What’s the startup scene like in Berlin? Are you happy to have started Raisin there?

Raisin is very happy to have established its operations in Berlin. The vibrant startup scene and the plentiful availability of highly-qualified expatriates, facilitates the recruitment of talent. Given that a talented workforce is one of the key drivers of our success, the pool of talent Berlin provides is extremely important.

Do you think that the Brexit and the tense political climate could represent an issue for the Fintech industry?

The fintech industry will continue to grow regardless of political turbulence: Events such as Brexit can however have a very heavy local impact. If fintech firms based in the UK lose their passporting rights to mainland Europe this could greatly reduce their potential customer base – we are talking of an EU market of currently 510 million people which would shrink to just over 64 million people living in the UK. On the other hand, it is clear that EU fintech companies will be less affected, given that the population of the EU without the UK will still amount to over 440 million people. This means that UK-based companies may have to establish a second base office in the European Union in order to do business on the continent. This adds overhead expenses and may be in some instances unwieldy.

What excites you most right now and what do you see next for Fintech? Do you believe the hype about Blockchain and Artificial Intelligence?

Overall I see two large trends that will define the next few years in the banking and fintech sector: In the fintech sector, I see regulatory and competitive pressure pushing banks to open access to their APIs, thus leading to more competition, greater transparency and above all more choice for customers. This will mean that banks will no longer be able to count on captive customers. In this context, easy access to information across banking institutions will make marketplaces increasingly important in determining where end customers place their money, based on the superior transparency and competitiveness of financial offers these marketplaces make available.

The second trend that I see emerging is a significant increase in context-based services and products. That is, a situation where the increasing availability of reliable and affordable data, makes it possible for companies to offer products and services at the instant customers most need it, both in time-sensitive and location-sensitive contexts.

Do you have any books, blogs, podcasts or other publications that you would suggest to other entrepreneurs? 

The books I recommend are Ben Horowitz’ “The Hard Thing about Hard Things” and Peter Thiel’s “Zero to One” which are insightful and fun to read. A publication I regularly read is the Economist. For news and trends in the fintech sphere I like listening to Andre Bajorat’s “Payment and Banking” podcast.

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Alessandro Ravanetti
Alessandro Ravanetti
Alessandro Ravanetti is a writer and editor based in Barcelona. He helps startups with their content strategy, curates the Techstars Startup Digest's fintech newsletter, serves as an independent expert for EU projects, and mentors aspiring changemakers with Bridge for Billions.

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