Deutsche Bank takes 5% stake in German fintech

Deutsche Bank has acquired a 4.9% stake in the German open banking platform Deposit Solutions, elevating the start-up to the position of Germany's second-biggest fintech unicorn.

Reports suggest Deutsche is paying €50m (£44.1m) for the stake, which would value Deposit Solutions at more than €1bn (£880m).

The deal with Deutsche means that Deposit Solutions is now propelled to the position of being Germany's second-biggest fintech unicorn, behind the Berlin-based lender N26, which in July was valued at $3.5bn (£2.81bn), according to the Financial Times.

Deposit Solutions links clients and lenders through its software, meaning banks can collect deposits from individuals who are not its direct customers. It is part of the broader trend of open banking in the financial services industry.

Deutsche has been a customer of Deposit Solutions since 2017 and will now hope to benefit from the platform's growth plans.

Deposit Solution's software has been a key tool that Deutsche's customers use to funnel savings to third party lenders.

The move by Deutsche marks its biggest investment in fintech to date. The German banks also owns a stake in financial data start-up Finanzguru.

Tim Sievers, CEO and founder of Deposit Solutions, said: “With our open banking platform we are building the infrastructure for the deposits business of the future.

"The investment of Deutsche Bank is a milestone for us in two respects. Firstly, the expansion of our platform to include other Deutsche Bank businesses in Germany and abroad will help us grow even faster. Secondly, for the first time a client of ours becomes a shareholder of the infrastructure they use.”

Along with Deutsche, other investors in Deposit Solutions include Peter Thiel's fund Valar Ventures and the private equity company Vitruvian Partners.

The British banks Close Brothers and the fintech firm Atom are amongst other clients of Deposit Solutions.

Karl von Rohr, President of Deutsche Bank, said: “We have been investing in our capabilities to also operate as a digital platform for a considerable length of time. 

"In the digital age the only players who will maintain client contact are those who can offer the best products, even if they are provided by third party vendors. Deposit Solutions has the right infrastructure to enable this in the important business segment of fixed-income deposits. We are looking forward to growing the business with such a strong and reliable partner.”