Deutsche Bank buys stake in a fintech company months after major restructuring

Key Points
  • The deal makes Deposit Solutions Germany's second-largest fintech unicorn.
  • It comes just months after Deutsche Bank announced a huge restructuring program.
  • The investment signals growing interest from banking giants in the fintech space.
A cyclist rides outside the Deutsche Bank headquarters in Frankfurt, Germany.
Peter Juelich | Bloomberg | Getty Images

Deutsche Bank bought a 5% stake in German financial technology start-up Deposit Solutions, valuing the firm at north of 1 billion euros ($1.1. billion).

The deal makes Deposit Solutions Germany's second-largest fintech unicorn — a private business that's worth $1 billion or more — according to publicly available data. Deutsche did not disclose how much money it had invested into the firm.

It comes just months after the bank announced a huge restructuring program that would see 18,000 people laid off, as it scales back on its investment banking operations and looks to improve profitability. It also follows the collapse of the lender's merger talks with domestic rival Commerzbank.

Deposit Solutions' software lets third-party lenders that offer savings products plug into retail banks' platforms, part of a broader trend in the financial services industry known as open banking. The firm says the benefit of this is that it lets retail banks that don't sell savings products offer them to customers, often at higher interest rates.

Apart from Deutsche, the firm counts Peter Thiel's venture fund Valar Ventures and private equity firm Vitruvian Partners as investors. Deposit Solutions said Deutsche has been one of the company's customers since 2017, while other clients include Germany's MunchenerHyp, British bank Close Brothers and the fintech firm Atom.

The deal signals growing interest from banking giants in the fintech space, with other lenders like HSBC and Goldman Sachs also ploughing cash into similar providers. It could also be seen as taking advantage of open banking rules from the EU, which authorize third parties to access bank customers' data and initiate payments on their behalf.