The Berlin credit comparison portal Smava has given, for the first time, earnings figures – and sound quite impressive: As company boss Alexander Artopé revealed this week in an exclusive interview with Finanz-Szene.de, the earnings are to have added up in the past financial year to $172 million (€162 million), pushed naturally also by the fusion with the Hamburg competitor financial check. To the classification: Thus Smava might play for the moment in terms of conversion approximately in the league of the N26 bank. Although N26 Bank has not yet given any figures for 2021, it had aggregated revenues of $136.5 million (€128 million) in 2020 – although Smava has been on the market for several years longer than that.
The Smava figures are neither in the Federal Gazette nor otherwise visible. Artopè clarified in the discussion however made it very clear that the $172 million (€162 million) was actually the sales revenue generated through loan brokerage.
Artopè did not want to give a comparative figure for the previous year, but he stressed that “we are making good progress towards our goal of replacing Check24 as the market leader and should have further reduced the gap.” How much revenue the Munich-based comparison giant makes in its installment loan business is one of the best-kept industry secrets of all. If you assume a very, very roughly $213 million (€200 million), you should at least not be completely wrong. Check24 did not want to comment on this when asked.
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A few speculations about margin and volume
Smava is one of those fintech companies whose long-term potential is very difficult to estimate – even for investors. Should the Berlin-based company actually succeed in replacing Check24 as the market leader in the installment loan segment, it would presumably be a billion-dollar company that would have to be sold very well on the stock market at some point.
It is less clear whether Smava, even as the “eternal” number two, would be able to achieve the profitability required for a billion-euro valuation by increasing the volume of loans brokered and, above all, by achieving higher margins. Because: Even if comparatively high revenues can be generated with the loan brokerage – the earnings are usually bought at a high price via TV advertising and Google donations. Thus Smava works for the moment still loss-making (how loss-making exactly, Artopé did not want to say), even if the margins are to have improved in the course of the fusion with Finanzcheck further.
It would be nice to know (also for the banks), on which for a mediated credit volume the conversion proceeds of $172 million (€162 million) are based – this value however Artopé did not want to call comprehensibly also still. Admittedly, if one assumes that the recent revenue growth came not only from the margin but also from the volume, we consider an order of magnitude somewhere around $4.8 billion (€4.5 billion) to be realistic based on previous calculations. This would result in a margin of 3.6%. In other words, for every $10,673 (€10,000) of loan volume brokered, Smava would retain $384(€360).
And there is another factor to consider: How much of the $172 million (€162 million) comes from direct business with end customers – and how much from B2B partnerships with portals such as Autoscout or Mobile.de (these integrate Smava as a financing tool in their closing routes, but in return demand a presumably lavish share of the margin)? To this question, Artopè was able to elicit that in 2021 the much more lucrative B2C business would at least not have grown less strongly than the B2B business. The Smava boss did not want to say anything about the distribution. In the industry, however, it is assumed that the vast majority of sales should be B2C sales.
Smava funds again – and focuses on construction financing
Either way – what the numbers should show in any case: The Smava investors (among them the strongly engaged venture capital specialists Earlybird and Vitruvian) are obviously sticking to their ambitious “anti-Check24 bet” or are even prepared to raise their stakes a bit further. As can be seen from an entry in the commercial register published this week, there has recently been another – albeit not too lavish – capital increase. Artopé spoke to us of a “two-digit million amount”, the financiers would come from the existing shareholder circle. The Smava boss did not want to comment on the valuation. However, it is emphasized in the environment of the enterprise that the valuation in comparison to the large “We take over financial check” round at the beginning of 2021 has not worsened in any case despite the difficult macroeconomic conditions.
According to Artopé, Smava wants to use the fresh financing to push the entry into construction financing. This business was recently running on the side, now the Berliners apparently want to expand private residential property financing into a second pillar in addition to consumer financing (according to information from the financial scene, the technology partner here is the Berlin mortgage platform Hypoport). Most recently, “a good 10,000 loan requests” had already been received in this area every month, said Artope, and he believes he is already “among the five largest platforms” – an assessment that we do not necessarily adopt as our own. The Smava boss did not want to say how many loans were actually brokered from the inquiries.
Artopé also sees his company on the course beyond the growth in earnings in the core business and the ramp-up of the construction business. The integration of Finanzcheck was completed according to plan by the end of the year – both in terms of IT and personnel (with corresponding cost synergies). According to a social media evaluation by Finanz-szene, the merged Smava/Finanzcheck had a total of 428 employees (304 of them at Smava and 124 at Finanzcheck) today (if you limit yourself to the employees registered with Linkedin) – the number of employees is, therefore, Smava decreased by 18% within 24 months, with the financial check even by 30%.
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Author: Anne Kings, Fintech – Born2Invest