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Success at Deutsche Börse FinTech Hub, part 4: Savedroid

23 Jun 2017

Success at Deutsche Börse FinTech Hub, part 4: Savedroidsavedroid – an app that helps users save money

The FinTech Hub is an initiative to support the fintech community in Frankfurt and the Rhine-Main region. The hub connects start-ups by offering co-working spaces, consulting as well as networking services and serves as a hip event location. We talked to Dr Yassin Hankir, one of the founders of savedroid – an app that allows users to save money automatically and brings them closer to fulfilling their wishes, one step at a time.  

Mr Hankir, as one of the founders of savedroid, please tell us something about yourself and your colleagues.

Prior to the creation of savedroid, I co-founded vaamo/Robo-Advice in early 2013 and worked for the company for two and a half years. Right after completing my studies at Goethe University in Frankfurt, where I studied economics and earned a PhD in business administration, I worked as an advisor for McKinsey in the banking sector for four years.

My co-founder at savedroid, our CTO Tobias Zander, is a clear-cut “techie”. He took his first steps at programming on an Atari, building experience over more than 15 years. He has previously held the position of CTO at a web agency here in Frankfurt. Our third founding member is Marco Trautmann, an IT business engineer with many years of experience as a consultant, first for Accenture, then McKinsey. He quit his job to join our start-up adventure. 

How did the three of you become acquainted?

I was quite certain about what kind of people I needed, because I had one particular question: how can I create a mobile app for the average customer which helps him or her regularly put money aside in everyday situations? And how can we automate this process to actually make it fun to build savings? When I met my co-founders Tobias and Marco, it quickly became clear that were are a perfect match – both professionally and personally.

How did you come up with the idea to help people accumulate savings?

We founded the company in September 2015, when we were certain that all three of us saw a real business case in the idea – it’s a problem virtually everyone faces. You want to go on vacation or buy a new laptop, but you don’t have the required funds – so you have to save money to get there. savedroid can make it easier to reach that goal, with small amounts that don’t hurt. Most people lack the discipline to put money aside. We aimed to create an automated solution for this problem, something to spare the user from having to make an active decision each and every time. This is also the reason why we decided to work with small amounts, like €2 or €5. And that is how our idea started to take shape.

How did your cooperation with the Deutsche Börse FinTech Hub come about?

We first came into contact with the FinTech Hub through the local fintech community here in Frankfurt, which is where we first heard of Deutsche Börse’s plans for a FinTechHub. We were immediately drawn to their attitude of “Let’s just do this”. In the end it was this approach that convinced us as a start-up. What bothered me about other initiatives was that there was a lot of talk, but they all had little to show for it. At Deutsche Börse, we experienced the exact opposite. It might not seem like it from a corporate perspective, but for a start-up, four weeks are a very long period. Our current planning horizon extends until autumn. Of course we also have plans for the more distant future, but our focus is always very short term. Which is why we were extremely impressed with the fast pace at Deutsche Börse. It convinced us to apply here.

Another point that should not be left unmentioned is the location: it is an undeniable benefit for our recruiting efforts to have our offices right on Berger Straße. As a start-up we expect our staff to work long hours and we are unable to pay high salaries. It really does help that our office is in a top location. 

Tell us about your requirements. What kind of support did you expect?

The most vital issue by far is infrastructure, one of the major challenges in Frankfurt. It is extremely difficult for start-ups to find centrally located, affordable office space. A further benefit of Deutsche Börse Venture Network is the opportunity for start-ups to communicate with each other. Even though we work on completely different projects, the challenges we ultimately face are often the same: we all need a good tax advisor, a software solution for our marketing tracking or advice on design issues. What is great about start-ups is that negative feedback is also openly communicated, which is invaluable as it saves us a lot of time.

For us, what it all came down to in opting for Deutsche Börse Venture Network was the issue of trust. The brand value of Deutsche Börse is extremely high. Being able to say that Deutsche Börse has looked at your product, has set selection criteria and decided to take you on is tremendously helpful for your own image and really raises your profile.

Which criteria did Deutsche Börse require you to fulfil?

We were required to have a sustainable business model that will stand the test of time. The Deutsche Börse Venture Network team took a very close look: who are the people behind the business? Are there certain financial resources to ensure stability? Does the idea have a sound chance on the market? Who are the team members, what are the founders’ respective backgrounds, does the venture already have employees? Deutsche Börse will, after all, want to ensure that its newly created FinTech Hub is successful and not have to report to journalists that all four start-ups are insolvent just two months later. Deutsche Börse is, of course, also keen on fostering innovation, which is at the very core of start-up culture. Why not encourage a certain transfer of knowledge, at least on a corporate culture level? 

Let’s get back to savedroid. How exactly does it work and what is your target group? 

Here are some basic facts: we are relevant for young people. 80 per cent of our users are under 40, 50 per cent under 30. Most of our users have their checking accounts at a savings bank. We have about as many men as women, and after recently relaunching our corporate design and marketing we even have a slightly higher percentage of female users. 

How do users save money using the app?

The savedroid app is installed free of charge on iOS or Android. After they have downloaded the app, users choose which category they are saving money for. Pre-defined categories include “holiday”, “car”, “technical gadget” and many more. Users then choose a target amount to be reached, a deadline and how they wish to save money: no matter what the activity, it can be chosen as a “saving rule” as long as it can either be tracked through the smartphone or occurs on the checking account connected to the app.

A saving rule is based on an if-then logic, and users can configure it according to their own requirements, for example: every time I pay via debit card, the amount due is to be rounded up to the next euro or to the next two euros. Another possible rule: upon receipt of my monthly salary, a certain percentage is to be set aside – or, every time I go to the gym or reach a certain goal, a certain amount is transferred. The money to be saved is always transferred from the checking account to a savings account.

What is completely new about our idea – and with this innovation, we are stepping into the realm of artificial intelligence – is that we let our small droid, our little robot, decide autonomously how much money is saved at which time. How does this work? The user grants our app permission to the checking account information. As a rule, this comprises all account transactions going back six months. This information is fed into a machine learning tool which calculates all combinations to detect patterns. Receipts and expenditures are categorised: salary, rent, regular debits, e.g. for a mobile phone contract or electricity. This makes it possible to forecast how the respective user’s account balance is likely to develop. If the user has more money in his or her account than required to get through the month, this is interpreted as savings potential. Within this potential, the algorithm automatically transfers a certain amount to the user’s savings account held at our partner bank, Wirecard bank.

The next step is a pre-calculation of whether or not the user is actually likely to reach the goal – including hands-on advice: “You will not reach your goal, but here is an alternative solution.” In the future we want to enable users to save even more money by helping them reduce fixed costs. Due to the fact that the app has access to the user’s checking account, we are able to see what the user spends his or her money on, which means we can identify fixed-term contracts, e.g. for electricity. Through market analysis, we can then determine whether there is a more cost-effective option, which we suggest to the user. The app will then allow the user to switch to another electricity supplier. 

How are you going to make money?

With this last step, that is by facilitating contract changes. If the client decides to switch to another supplier, the new supplier pays us a commission. In this, we are similar to online comparison portals such as Check24 or Verivox – with the difference that with us, users will not have to initiate the change. We will relieve them of the task of searching and optimising and simpley serve them the solution on a silver platter. 

How many users do you currently have?

We are currently at more than 150,000 downloads and counting. That’s above expectations, because as it turns out, our service initially reached a much broader target group than anticipated.

What next steps do you have planned?

The immediate next step is to roll out the contract optimisation feature in the app. We also plan to further boost the number of downloads, with a target of exceeding 200,000 in summer. And our greatest goal, which we hope to achieve in the third quarter, is a series A financing round. 

What exactly will the funds be used for?

Most importantly, to build a broader base of customers, especially internationally. We would like to quickly grow our business across Europe. The first market we will tackle is France, which is attractive due to its size and the fact that the savings rate there is actually higher than in Germany.

Our last question: what is the planned volume of your initial financing round?

We plan on raising a two digit million amount this year, and we are well aware that this rather ambitious. However, we believe that we need this volume to develop our potential as quickly as is possible and successfully position savedroid as a European fintech. Given our excellent traction we are convinced that we will achieve this target amount. We all need a major objective to inspire us to give our all. Anything else would quite simply be boring.

All the best to you and thank you.

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