BERLIN: Deposit Solutions, a German fintech firm backed by Silicon Valley investor Peter Thiel, is launching its savings portal in the United States as it seeks a slice of the US$16 trillion market for deposits in the world's biggest economy.
The nine-year old startup's platform will enable savers to build a portfolio of deposits, while banks can broaden their funding sources without having to go through a broker, CEO and founder Tim Sievers told Reuters on Tuesday.
Deposit Solutions, a tech 'unicorn' based in Hamburg, has mediated US$30 billion in deposits so far in Europe, where more than 150 banks from 20 countries operate on its platform.
And, even in a time of near-zero interest rates, there is demand among those who are better off to manage their cash. Sievers said the average Deposit Solutions customer saves 40,000 euros (US$46,772) - a figure that tends to rise over time.
Deposit Solutions will operate in the United States under the SaveBetter.com brand. "It's a massive market - a market that structurally lends itself to our proposition," Sievers said in an interview with Reuters.
The U.S. operation will run on Deposit Solutions' existing technology platform, which is based on the idea of banking as a service. Banks pay a margin on deposits, meaning costs rise in line with the deposits they attract.
"Deposit Solutions can do for the deposits business what PayPal did for the payments space," Thiel, who backed Deposit Solutions in 2016, said in a statement.
Deposit Solutions doesn't disclose financials but Sievers said its core business was profitable.
It has distribution deals with established banks including Deutsche Bank , which last year acquired a 5per cent stake. At the time Deposit Solutions was valued at more than 1 billion euros, according to media reports - making it a so-called tech 'unicorn'.
In the direct-to-consumer space Deposit Solutions' platform, Zinspilot (Interest Rate Pilot), competes with rival German fintech Raisin's Weltsparen (World Saving) product.
Raisin launched a business-to-business product in the United States earlier this year, and plans a consumer product in 2021. (US$1 = 0.8552 euros)
(Reporting by Douglas Busvine; Editing by Susan Fenton)