Building a sustainable business matters more than ever. After months of lockdown, business leaders have either experienced tremendous loss or great gains during the pandemic. As companies begin to ramp up their operations, setting up the right business structure as you reboot should be at the forefront of everyone’s mind. Utilizing resources that make running your business simple, yet compliant, frees up executive management teams and founders to focus on the business at hand.
TechScale Berlin exists so we at Exberliner can support startups and innovations that are making an impact on business, society and environment by sharing stories that matter and highlighting those “getting shit done!” Earlier this year, we mentioned a few companies on track to put a “ding in the universe,” and for the second half of the year we will make an effort to go behind the scenes to meet the founders, hear their stories and find out exactly how they plan to make a difference.
As an expat, I experienced the complexities of opening a business bank account in Germany first-hand. My experience was so horrible and outdated that I decided to just keep my business account in the US after three attempts. Innovation in this space is definitely needed to align with the busy lives of business professionals. Now that we are exiting the pandemic blues, it’s time to start building and open that bank account!
This week we took the opportunity to catch up with Penta. They just received €18M in mid-March and are ready to help you jumpstart your business. Penta is an online bank account for startups and SMEs and is led by an experienced business professional. Marko Wenthin (founder), who served on the board of solarisBank and Deutsche Handelsbank and his team are shaping the future of banking. I find the business, and their team, fascinating. After this read, I think you will feel the same.
What was the inspiration for starting Penta?
Penta got started because we, as cofounders (we’re all entrepreneurs ourselves), experienced first-hand what a struggle it is to open a simple business bank account – it was paper-based, time consuming and literally took weeks. To change that, we founded Penta to make business banking digital, fast and easy.
How big is your market?
At the moment, we are focusing on our core market, Germany, which has more than 2.5 million SMEs and freelancers. Nevertheless, we don’t want to exclude expanding Penta into other countries, but there is no specific time frame yet.
Prior to the major disruption of Covid-19, you closed a financing round of €18.5M from RTP Global, HV Holtzbrinck Ventures, ABN AMRO Ventures and VR-Ventures. What did the investors find to be your unique selling point?
That would be a good question for our investors. I believe that they liked the whole Penta package: a dedicated team, a very steady customer growth rate (over 1200 customers per month) and our very customer-centric approach paired with full transparency. For example, everyone can follow and vote the next features on our Open Product Road Map. We also have a fairly sustainable business model with growing revenues.
Have you seen more businesses forming within the last few weeks, or has the pandemic slowed business formation?
We still see a lot of new foundations from entrepreneurs coming up with new business ideas due to the crisis, which is great. On the other hand, we also see liquidations from companies who didn’t manage to adapt or didn’t have enough savings to overcome the situation.
What perks do you offer to startups and SMEs who utilize your services? Are you running any special promotions to help companies jumpstart their operations?
We did a better thing than promotions – we lobbied for our customers. At the beginning of the crisis, it wasn’t yet clear how fast the German government would release financial help for businesses in need, so we wrote a petition and asked the government to quickly react with fast and easy help for freelancers, small and medium businesses. When the help was finally announced and executed, we accumulated all information from the different regions about how to apply for those help on our Corona page. Unfortunately, fintechs are not yet allowed by the KfW to distribute those Corona loans themselves, therefore we are currently working on partnerships with different regional banks, through which our customers can apply at KfW without undergoing another identification process with a new bank.
Marko, tell us about your background.
I joined Penta in June 2019, when the company was already led out of its starting phase by the founding team. I am originally from Brandenburg. Before joining the fintech sector, I spent 16 years in traditional banking, most of it at Deutsche Bank, in many different positions across retail, corporate and investment banking. Of these 16 years I spent 10 abroad, in Argentina and in Poland. In Poland I became the youngest board member of a bank at the age of 30 and acted as COO overseeing IT, operations, back and middle-offices. In my mid-30s, I changed my corporate career for an entrepreneurial one.
I founded a couple of SaaS businesses and even a helicopter airline which, due to the financial crisis of 2008, had to be shelved briefly before starting operations. I helped Asseco, one of the largest IT software companies in Poland, to expand into Western Europe and acted as a non-executive board member in a couple of the acquired companies. In 2009, I created Sofort Bank, a sister company of SofortÜberweisung, which was later sold to Klarna. Sofort Bank became Deutsche Handelsbank. In order to bring banking to the next level I cofounded solarisBank and defined banking as a platform in the real world.
How did you get connected to RTP Global? They just launched a $650M fund, correct?
In an investment round it is normal that you talk to a long list of investors who introduce you to even more. We heard great things about RTP as investors and got introduced by Holtzbrinck Ventures, who have made a couple of co-investments with RTP.
Two bank-backed funds have also invested in you (VR-Ventures and ABN AMRO Ventures), so your company must be special. How do you differ from their other portfolio companies (solarisBank, Tink, CrossLend, Okto)? Do you see strategic synergies for the future?
There are definitely synergies in the future, even some very specific ones. For example, we are in talks about cooperating with some Volksbanken in order to distribute KfW loans for companies in need. We are delighted to have such strong investors on our side, who will also help us with their network and sparring strategies. We do also have synergies with their other portfolio companies. For example, solarisBank is our banking partner with its fully BaFin licence and CrossLend is, like us, part of the fintech ecosystem by finleap.
How big is your team? Are the members of your management team German, or is there some diversity in the upper ranks?
Penta has a strong team of more than 90 people. We are very diverse at heart, which is also reflected in the C-level management team, with nationalities such as Ukrainian-German, Serbian-American-Croatian, Swedish, Austrian and German. We have a great management team who complement each other perfectly.
What is your pricing model and why should companies utilize your banking service versus open a business account with a traditional bank?
We have three pricing models at Penta: Advanced, which is best suited for freelancers, young companies or entrepreneurs who are just starting operations (€9 per month). Premium, for operating digital and offline businesses with several employees and more complicated payments or book-keeping needs (€19 per month) and Ultimate, which is our recommendation for companies that need a tailored solution. All features are bespoke based on the company’s needs, therefore also the price range is individually tailored. Each pricing model comes with a free two-month trial period.
Penta is more than a business banking account. In addition to our digital and easy opening process (in general, it takes only a few minutes to get through the fully digital application process), our services go beyond banking. Our customers enjoy integrated bookkeeping software, digital expense management, team cards (Visa Debit Cards with individual limits) for their employees and more than one user for their account management.
What are your next products going to be?
Penta developed from a pure business bank account into a platform for business banking by integrating all sorts of services to help entrepreneurs manage their finances. Customers can choose between different plans including features like multiple Team Cards (Visa DebitCards), Expense Management, integrated accounting, multiple users, international money transfer etc.
Especially in 2019 and first quarter of 2020, Penta developed and released a whole array of features, like SEPA Direct Debits, digital receipt management, batch payments and flexible financing solutions. Cash-flow planning, sub-accounts and virtual cards are some of many more to come. The larger roadmap includes the implementation of new financial features, insurance and legal services, further options in the field of lending, integrations of additional accounting tools, accepting card payments offline and numerous other additions. We are also offering a new package for companies with more sophisticated management needs and more transactions that require a tailored solution. This is our Ultimate Plan, where all features are bespoke and based on your needs.
Penta is a business banking Platform offering digital banking for small and medium businesses, businesses in foundation and freelancers. Companies can apply for a business account within minutes and receive a German IBAN, debit cards for expense management and other financial services. The company is headquartered in Berlin, with an office in Belgrade. The management consists of Marko Wenthin, Jessica Holzbach, Luka Ivicevic, Lukas Zörner, Henrik Jondell and Igor Kuschnir.