Deutsche Bank buys minority stake in Traxpay
Deutsche Bank has bought a minority stake in Traxpay, a financing platform for suppliers.
Stefan Hoops, head of Deutsche’s corporate division, has said it’s been difficult for the bank to keep up with disruptive competition like Traxpay, according to Frankfurter Allgemeine.
The bank is initiating its bank-fintech strategy in supply finance. “Our answer to the question ‘fintech or bank’ is: ‘fintech and bank’”, says Daniel Schmand, Deutsche’s head of trade finance and corporate loans.
How does Traxpay work?
Traxpay allows traders and suppliers to easily find each other and understand who has a liquidity surplus.
If the dealer has liquidity surplus, they can pay for their goods more quickly and receive a higher discount from the supplier. But if the trader requires interim financing from a bank, then Traxpay can also facilitate this.
In the case of traders needing financing, Traxpay says it processes a volume of more than €1 billion a year for its customers.
Deutsche will use the fintech’s platform technology to expand its own supply chain finance offering.
Future for Traxpay
Whilst Deutsche’s investment is a big milestone for Traxpay, the fintech’s CEO Markus Rupprecht doesn’t want to stop here.
Rupprecht worked for Deutsche from 1991 to 2001 before founding Traxpay in 2009. He wants other European banks to become shareholders.
If more banks use the same, unified platform, then Traxpay has a better chance of rivalling US platforms for supplier financing.
“The use of a single platform brings great transparency and efficiency gains for customers and suppliers as well as for the financing partners,” Rupprecht tells Frankfurter Allgemeine.
This is in Deutsche Bank’s best interests, as it will see the value of its stake in Traxpay increase dramatically.
The bank said in a statement that it is welcoming fellow banks on the continent as investors and cooperating partners.