Hamburg, 28 January 2019 – A dynamic start to the year. Funds raised as a result of the capital increase will be deployed in increasing the bank’s re-financing of lending platforms and to scale up the fronting infrastructure of the Marketplace Banking division. The capital increase supports the continued progress of Varengold Bank AG in its strategic direction as a partner of Fintechs.
The capital increase, which was adopted during the last general meeting (21/08/2018), has been fully allocated. Nearly 7.8 million euros of new capital was raised to enable further growth of the bank’s Marketplace Banking business. “To be the banking partner of Fintechs requires proficient product knowledge, regulatory know-how, combined with flexibility and a pioneering spirit. This is what we have been offering for the past six years, through the creation of new partnerships and the onboarding of clients”, says Frank Otten, board member of Varengold Bank AG.
The capital increase has allowed the management board to acquire new investors (in addition to existing investors), primarily from the finance and insurance sectors. The new shareholders show their confidence in Varengold’s strategic focus on the Marketplace Lending industry as well as its competence of being a strong provider of transaction banking products.
Varengold Bank’s one million euro participation in Kreditech
An example of a long-standing business relationship with a lending platform is Kreditech. To date, the bank’s partnership with Kreditech has been solely as a provider of credit. This partnership (since 2014) has now additionally led to a one million Euro investment in the Hamburg-based Fintech Kreditech Holding SSL GmbH. “The cooperation with Kreditech is a positive and representative example of our role as a long-term banking partner” says Lukas Diehl, Head of Marketplace Banking at Varengold, at its debut as an equity investor. According to Lukas, “Kreditech is at a growth threshold from a Fintech to an enterprise whose business model will establish itself permanently in the industry. We want to actively support this development.”
Scope of business – what is offered to Fintechs and which products are supported
20 marketplaces are already on-going partners of the bank through Varengold’s activities as provider of debt and fronting services. In terms of regulatory requirements, Lukas and his team are able to determine which business models are compatible with the high regulatory standards. This advanced kind of a bank partner underpins its value when it comes to proofing the sustainability of an innovation.
Often Varengold acts as an early-stage debt provider. If a recently launched platform has shown a strong financial start but is not yet able to present comprehensive investment rationale, for example in its track-record or data, risks are compensated accordingly, typically through first loss pieces. “To date, we have always been able to develop solutions for smart and promising business models”, Lukas continues.
Varengold specialises in several products offered by the Marketplace Lending industry: P2P-financing of businesses, trade finance, purchasing of invoices and receivables, real estate financing and consumer credit. The bank´s portfolio has grown with diversification by duration, rating and type of credit and is projected to increase further during 2019.
About Varengold Bank AG
Varengold Bank AG is a German bank founded in 1995, which acquired its full banking licence in 2013. It is headquartered in Hamburg, with additional branches in London and Sofia. Its core business areas are Marketplace Banking and Transaction Banking (Commercial Banking), and it focuses on cooperating with European Fintechs, in particular lending platforms. The product range on offer includes funding, debt and equity capital markets products, fronting services for products subject to banking licence requirements and international payment services. Members of the Board of Managing Directors are Dr. Bernhard Fuhrmann and Frank Otten, who together with a 70-strong international team continuously help to modernise the financial sector. Varengold Bank is registered with the Federal Financial Supervisory Authority (BaFin) under 109 520 and the Varengold share (ISIN: DE0005479307) has been listed on the Open Market of the Frankfurt Stock Exchange since 2007. For more information, see www.varengold.de/en/home/.
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