After Italy and the United Kingdom, Moneyfarm has been operating in Germany since June 2019. This Italian scale up, which is one of the few around, has started carrying out operations in this new market after acquiring, in November 2018, the robo-advisor Vaamo, the first independent digital asset manager to open in Germany in 2014 and among the main robo-advisors active in the country.
The opening-up in Germany is an important and further step forward in a process which is already underway for the internationalisation of this fintech, born in 2011 and today one of the leading digital asset managers in Europe with over 700 million euros of assets under management for 40,000 customers.
We took the opportunity to ask Paolo Galvani, President and Founder of Moneyfarm, for some details about the news and some advice from former fintech startups.
Opening a third European market is an important step! What does it represent in your growth path? What are your future objectives?
It is a very important step, as well as the culmination of over a year’s hard work from the team. For us, launching in Germany is a fundamental step in our mission to become the leading European digital wealth manager. Operating in the largest European markets is necessary for us to achieve our goal and allows us to take advantage of country-specific business opportunities.
What are the main reasons that led you to choose Germany as the third market after the UK and Italy?
After the UK, Germany is the largest market for retail investment in Europe, supported by positive economic momentum. We’ve found that German savers have the right mindset when managing their money and are open to using digital technologies to invest.
What are your distinguishing features and value proposition in the German market? Are they similar to what makes you stand out in the other two markets?
As part of the launch, we have jointly developed a cost-efficient multi-asset investment product with Allianz, offering a unique combination of active and passive investments to retail investors in Germany. The unique product leverages Moneyfarm’s extensive experience in offering digital wealth services with Allianz’s experience of managing mutual funds and risk management expertise. By transforming the relationship between traditional wealth management and innovative fintechs, we’ve worked closely with Allianz AM over the last couple of years to deliver a cost-effective solution that combines technology, expertise and risk management to deliver better value for customers. Our strategic interests align – digital by default, customer centricity and simplicity – which is why we have joined forces.
Moneyfarm is one of the most financed fintech companies in Italy. How do you think the financial backing of innovative companies is changing in Italy and what could lead to their further growth?
Data shows that in Italy there is a growing appetite to invest in innovative companies. The situation has improved from when we started 6-7 years ago, but there is still a big gap to fill when we compare the Italian venture capital landscape to that of other countries. This, unfortunately, is also linked to some structural limitations of our economy: very high corporate taxation, excessive bureaucracy. These limits also weigh on risk capital. However, I believe that Milan has all it takes to continue to be an important innovative district and the progress it has made in recent years is certainly encouraging.
You are now a Pan-European Fintech Scale-Up. Which are, in your opinion, the important factors that start-ups should keep in mind to grow internationally?
International growth is a challenge that shouldn’t be underestimated. Each market has its own specific characteristics and often a brand’s reputation has to be built from scratch. This is particularly relevant for a company like ours that aims to create a lasting relationship based on trust with its customers.
In your path to internationalization, what critical issues have you had to face? What advice would you give to an Italian company that has yet to undertake it?
There are many difficulties, ranging from ensuring you have the right in-depth knowledge of a new market to the need to make operations more efficient through team building (which, in a phase of rapid growth poses ever new challenges). Never underestimate the importance of recruiting, especially when taking the very first steps in a new market.
Today your team consists of over 100 employees, operating in 3 markets. What kind of talents do you attract and mainly where?
The skills we require are slightly different from those of a traditional investment company. Between 30%-40% of our workforce is in the tech-product area. One of the goals we are most proud of this year is to have launched a tech-hub in our Milan office. We have found some great talent who are already making an important impact on the pan-European business, transforming the way our customers manage their money, securing their financial futures.