Berlin-based fintech firm WeltSparen has been working on a simple-but-brilliant way to boost people’s cash savings — one that investors seem to like.
The company, known as SavingGlobal in the UK, just raised €20 million in a Series B round led by Palo Alto-based Ribbit Capital and Index Ventures. Russian entrepreneur Yuri Milner and Tom Stafford also took part in the round, which brought the company’s total funding so far to €30 million.
SavingGlobal runs an online marketplace that lets people access savings products in other European countries. The founders noticed that different banks in different European markets were offering wildly different rates of interest. But people weren’t taking advantage of the best ones if they were in another country, even though they had every right to.
EU law gives consumers the right to open bank accounts wherever they want in the continent, but ever since the crash of Icelandic banks in 2008 people have tended to avoid foreign banks.
As a result, German savers alone lost out on €190 billion in interest earnings over the last five years due to low local interest rates, according to a recent study by DZ Bank quoted by SavingGlobal.
SavingGlobal’s website lets people register once, and then save their money with any cooperating bank in any country they want, for a fixed term of at least one year. Customers can be sure that the interest rate being advertised isn’t a “hook offer” that banks often push to get people to open accounts with them, then reduce after a few months. Banks offering these sorts of deals aren’t allowed on the platform.
Right now SavingGlobal’s platform is only available to customers in Germany, but will be available in other countries later this year, the company said in a release. SavingGlobal offers products from banks in 9 different European countries. SavingGlobal has brokered over €500 million in deposits from more than 25,000 customers in, helping them earn an additional €10 million annually on their savings.
SavingGlobal is a desktop only product for now, because its target market of older, interest-chasing savers is heavily desktop-based. The company mentioned at a Socialbakers’ Engage 2015 talk earlier this year that it will roll out a mobile app eventually.