Speedinvest Blog

Spearheading the Neobroker Movement: Our Investment in Bitpanda

April 8, 2020

We almost missed the deal.

They say opportunity dances with those already on the dance floor, a quote that perfectly describes our relationship with Bitpanda. We first met Eric, Paul and Christian, the company’s founders, back in 2016 when Bitpanda was nothing more than an idea and a few written lines of code. Alas, after a heated debate we ultimately decided not to participate in the company’s seed round. We liked the team dynamic they had (and still do, for that matter) and their unique vision, but we felt the platform was simply not quite “there” yet — not to mention the huge uncertainty that surrounded their operating market at the time. Bitpanda has come a long way since then and, fueled by its self-sustainability, has grown to become an industry leader in the digital asset space and the most successful fintech in Austria. So, what made us decide now was the right time for a partnership?

Retail investors are left behind.

Well, the average retail investor has it bad. He has limited access to asset classes and, even within the available ones, often faces high barriers and costs to entry. Let’s ignore the fact that this investor cannot put his money in real estate for a second, and say he wanted to buy a couple of shares of Warren Buffet’s Berkshire Hathaway (BRK-A: $ 261,250.00). Well, unless he has a couple of hundreds of thousands of bucks to play around with, he’s not going to be able to do that. This puts our retail investor at a significant disadvantage; not because he is not able to buy the stock he believes in but because he has less opportunity at diversification than an institutional investor with deeper pockets does. The game is rigged from the start. You slap high and opaque fees as a cherry on top and you begin to see why the average retail investor’s return falls far behind that of an institutional one.

Introducing a new breed of neobrokers.

Enter the Neobroker. Essentially, what it does is level the playing field. If the term rings a bell, that’s because it’s meant to. What neobanks did to the banking industry, neobrokers will do to trading. The reasons are simple: access and simplicity. By digitizing and tokenizing traditional asset classes — think stocks, bonds, gold, currencies, ETF’s — and eventually, conventionally illiquid ones — such as real estate or private equity — a neobroker is able to offer fractional ownership to the mass market. And as their namesake suggests, they are able to do it in a highly transparent, digitally enabled and cost-efficient way. The final result being a revolutionized user experience (simplicity) that stands on a platform of equal trading opportunities (access).

Bitpanda is at the forefront of the neobroker movement.

We strongly believe that Bitpanda is spearheading the neobroker movement, and they have the traction to prove it. By offering services like 24/7 trading, real-time settlement, no minimum fees and cross-platform compatibility (iOS, Android, desktop) they have shown a deep understanding of their customer base, as well as their traditional pain points. A fact that is further proven by a user base of over one million and stellar customer ratings in an environment where those are hard to come by. While Bitpanda has started with precious metals, currencies, stable coins and crypto on their digital asset platform, a rapid expansion will add many more asset classes that will be accessible across Europe and beyond. And this is just the beginning. We can already envision a world in which you can buy your Chai Latte with shares of Amazon stock right at the coffee shop counter. The picture for the average retail investor is starting to look considerably less grim.

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Eventually, it’s all about the founders.

A significant benefit of meeting Eric, Paul and Christian (co-founders) early in their journey was the ability to confirm their skills as entrepreneurs and visionaries, a luxury few early-stage VC’s get to have. They’ve been able to scale the startup from a few lines of code written in Paul’s dorm room to a full-fledged company supporting over 180 employees (doubling just in the last 12 months). All the while navigating a traditionally unregulated market with utmost compliance standards and risk management.

Still not sure why we invested?

It was this ambitious vision coupled with proven expertise in scaling a business and in regulatory matters that shook our previous decision. A superior product offering and strong customer growth eventually reiterated our belief that early-stage investing has a never-ending learning curve driven by our founders. It is, therefore, our great pleasure to announce that all of us at Speedinvest are excited to be leading investment into Bitpanda and the future of trading and investing.

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