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Innovating on financial infrastructure: Interview with Martin Kassing, Founder and CEO at Upvest

Berlin-based fintech startup, Upvest wants to empower the next generation of investors and make investing more accessible by enabling businesses to offer investments to their end users. Their Investment API is used by neobanks, asset managers, and incumbent banks to provide customers with instant access to a full range of investment opportunities from crypto assets to ETFs and stocks.

In 2022, Upvest raised their €40 million Series B led by Bessemer Venture Partners.

We caught up with Martin Kassing, Upvest’s Founder and CEO about the journey of starting Upvest, his vision for Upvest, and the future of financial infrastructure.

 What led you to start Upvest?

Having spent my entire career in the financial and tech industry, I could see how both were merging to create new business models and products. Neo banks and brokers apps were rising with consumer momentum. While there was a lot of innovation in UX, the infrastructure backing these players was, and still is, outdated. Upvest grasped this market opportunity to provide a seamless, affordable, and scalable API that covers all aspects of brokerage, settlement and custody for all investment products. We are fully dedicated to developing a completely new cloud-based investment infrastructure, first for crypto and now for all securities including stocks and ETFs.

What learnings and insights did you take from your previous experiences at startups into founding Upvest?

My private equity background has enabled me not only to understand markets and business models, but also to find the right capital structures and attractive fundraising opportunities. My time as COO of ShopCo, a payment provider sold to Klarna, gave me the operational skills needed to create something from scratch by building great teams, products, and business models. It taught me that even great products don’t have to be great businesses and vice versa. While the early days of Upvest were about finding the right product-market fit, the recent period is more about scaling the company with the right people, culture and capital efficiency.

What’s your long-term vision for Upvest?

Upvest’s Investment-API enables any business to offer great investment experiences to its end-customers. Thereby, more people have access to affordable investment products, enabling them to build wealth in the long term. This is crucial to bridge the pension funding gap in Europe. With every API call, we get even more cost-effective, smarter and closer to empowering hundreds of millions of people with their investments.

Upvest currently has 130+ employees. Could you tell us about how your management style has evolved as the company has grown?

The early days at Upvest were focused on finding the right product in the right market, with many iterations and pivots. This required a high level of hustling mentality on my side, with a rigorous focus on long-term customer value. It took us many years and a lot of sweat to finally find a product that had a big impact in the investment space and was fundable. I was deeply involved in the product, every hire and client interaction.

Once we achieved product-market fit, my focus was on building a great business to grasp the market opportunity. This meant defining where I wanted to be hands-on and where I wanted to be hands-off. The focus has been on hiring a management team, constantly shaping our culture as well as getting first clients and raising capital. It is my constant ambition to make the company the best it can be, while leaving enough room for others to shine and grow. Now we also have an excellent management team that is dedicated to the operational heavy lifting of our company. Going forward, I expect culture and capital to be two key areas that will require most of my attention to create a fertile ground for healthy business growth.

Can you tell us about how you navigated securing regulatory approvals? What advice can you offer fintechs seeking approvals from regulators?

There have been many predecessors in the fintech industry that have obtained the necessary regulatory licenses. BaFin and the Bundesbank, as our regulatory authorities, welcome financial innovation. The dialogue and process with both has always been friendly and constructive.

Being prepared for the (ever-changing) regulatory requirements starts with the right people and compliance awareness within your company. Our bank directors are all home-grown and already knew the company and its culture when they were given their titles. This is unique as most companies hire a senior bank director from outside, which can clash with your startup culture. My advice would be to hire compliance and banking directors from within if possible.

Let’s look towards the future. What do you think the future of fintech in Europe looks like? and specifically around financial infrastructure and capital markets?

Fintech is the logical consequence of the digitalisation in the financial industry and will continue to grow at high rates. We will see a lot of innovation in both the consumer and infrastructure space in the future. The current investment crunch will only be a temporary bumper this year and next.

Infrastructure is likely to see one of the strongest growth rates in the fintech space, as it can reach a critical mass with consumer fintech companies that is needed to serve more traditional players. Five years ago, there was no option but to go enterprise first because fintechs were too small. Fintechs are demanding new innovations, so the newly built infrastructure will enable traditional players to be more modern, affordable and scalable as well. 

Investment infrastructure will be one of the fastest growing verticals in the infrastructure space, as the retail investment market is growing at a double-digit rate every year with a volume of over EUR 10tn. Furthermore, financial institutions need to upgrade their 10-20 year old backbone to remain competitive with fintechs.

How can fintechs and incumbent banks work better together in the future?

Incumbent banks have always worked with software companies to enable their business. These software companies have only recently become known as fintechs. It is natural for banks to outsource many parts of their value chain in order to focus on their core business. This trend will be accelerated by new technologies such as cloud and blockchain. New API-first core banking systems are easier to integrate, maintain and to grow with. It has never been easier for an incumbent bank to choose from a wide range of great APIs to get the best outcome.

What’s next for Upvest?

We are excited to announce big go-lives with leading global fintechs in the near future. Serving and delighting them will keep us busy. We are focusing on rapid innovation to give them an edge with Upvest. Exciting new products, such as a portfolio engine that enables direct indexing, are already in the pipeline. This year we will continue to grow in headcount, clients and revenues. It is a privilege for us to evolve further towards our mission, even in these challenging market conditions.

Amanda Pun
Amanda Pun
Amanda is passionate about startups, particularly in the FinTech and B2C spaces. She was one of the first employees of fintech startup, Homeppl, and has expertise in Product Management and Operations. She is based in London and originally from Canada.

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