Fintech Smava: When the credit intermediary takes out a loan himself

Alexander Artopé, managing director and founder of Smava

Alexander Artopé, managing director and founder of Smava


If you want to find out about people’s buying mood, all you have to do is look at their loans. Credit financing works like a kind of economic barometer. If consumers take a lot of money from banks, they usually want to spend it quickly. For cars, apartments, houses. As the figures published on Monday for the gross domestic product and the ifo business climate index show, we are in the middle of a recession due to the Corona crisis – the consumer climate is tense, to put it mildly.

It is all the more exciting to look at new numbers from the credit comparison portal Smava during this time. Germany’s first fintech spoke exclusively with in advance about the development of the 2019 financial year and the first quarter of this year.

Even in the first months of the first quarter of 2020, the mood among Smava’s customers looked good: The loan volume brokered rose by 45 percent compared to the same quarter of the previous year to around 900 million euros, as exclusively learned in advance. Overall, fintech has already brokered more than eight billion euros in loans.

Smava is one of the greatest growth and success stories in the German startup scene. The company started in 2007 as the first credit marketplace for loans between private individuals. Today, the platform provides consumer installment loans to banks online. The advantages of the business model: The installment loan is much cheaper and more convenient, says Alexander Artopé, managing director and founder of Smava.

Smava advertises with an average saving of 39 percent

Consumers would pay an average of 39 percent less for their credit through Smava and could compare different providers with one another via the portal. To calculate the actual loan amount, users must first enter all the necessary data, as with a bank. Therefore, as on all comparison platforms, the following applies: Experts from “Finanztip” recommend that consumers should not only be tempted by the low price, but also pay attention to the small print.

The money houses in turn pay a commission fee in return for the mediated customers to Smava, which the company uses to finance itself. The financial portal “Finanz-Szene” calculated on the basis of the business figures from 2016 that the commission fee in the year was estimated to be between 3.1 and 3.2 percent. The company does not communicate exact figures here.

Brokered less

After a good start in 2020, the company felt the first effects of the corona crisis in March, says the founder. In particular, 30 percent fewer auto loans were taken out. For the rest of the year, he expects consumer financing behavior to develop significantly more cautiously and that demand will only pick up again next year. The sinking buying mood affects the company economically: As learned, the company will lay off ten percent of its approximately 700 employees, i.e. around 70 employees.

However, Artopé does not see the business model in danger. “We continue to believe in strong growth in the German credit market,” he says. So far, only ten percent of Germans have made their loans online, according to the Smava managing director, that there is still great potential. Hence the decision not to expand at the moment and to focus only on Germany. This is surprising, as other European fintechs such as N26, the Estonian modular bank or payment service provider Klarna have massively attacked other European markets in recent years.

Now the company has taken out a loan of EUR 35 million from Kreos Capital, a lender for growth companies, “in order to be able to continue its previous growth course even in the Corona crisis,” said Artopé. Smava will use the money primarily for investments in digitization and product development.

Criticism of labeling the funding amounts

The company came under criticism for the first time in 2018: The industry medium “” expressed the suspicion that the financing rounds from the past (34 million in 2016 and 65 million in 2018) had turned out to be much smaller than the company communicated publicly. At the beginning of May, Smava published its figures for the 2016 and 2017 financial years in the Federal Gazette for the first time. Smava should not have shown the so-called “secondaries” (i.e. the purchase of existing shares from existing shareholders) when labeling equity in order to increase the published amount of financing in this way, wrote “Finanz-Szene”.

“The content of this criticism is incorrect. The numbers are correct and we named them correctly, except that we didn’t break them down. ”The startup didn’t want that, for reasons of competition. As a non-listed company, Smava is not obliged to disclose figures or an annual report, therefore neither the statements by Smava nor by the “financial scene” can be substantiated perfectly.

As Artopé also reveals, fintech – like many startups in the growth phase – is currently not profitable, due to the fact that the company is still making a lot of investments. In September 2017 it was already said that the startup was profitable, but “this was related to the operating result,” he says today.

Strong growth for years

Nevertheless, the numbers of the past few years show strong growth. Smava’s sales grew from 15 million in 2015 to 70 million in 2018, writes the portal “Finance Forward”. The company does not publish specific sales figures for 2019 and did not want to disclose them to yet. However, Artopé revealed so much: sales would grow roughly according to the volume of credit. Loans brokered grew by 35 percent from just under two billion euros in 2018 to around 2.7 billion euros in the past year. However, growth has already slowed down somewhat here: from 2016 to 2017, fintech increased the loan volume brokered by a full 80 percent.

Things went so well in recent years that Smava even spoke of an IPO in 2019, which has not yet taken place. A result of the corona crisis? “The IPO has not been canceled and has not been postponed,” says Artopé. “We only announced that we would prepare for one, but never set a time.” Because of the corona pandemic, the company currently has other priorities.

The pandemic is affecting Smava – like the entire German economy – but the product of the startup is promising. Experts have long predicted that bank branches will disappear more and more and that more and more financial services will be digitized and “brokered”.

A trend that Artopé sees accelerated by the Corona crisis. And of course not only Smava would like to benefit from. The Berlin company’s biggest competitor is the Check24 comparison platform. It wasn’t until the end of 2019 that the competitor applied for its own banking license, with which the comparison platform increasingly wants to offer its own financial products. However, Smava does not want to go this route, the focus remains on the mediation.


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