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Fintech Finanzcheck collapses after exit

What happens when one of the biggest German financial startups lays down a fat exit – and suddenly the growth-hungry venture capitalists no longer pretend the direction … (sorry, did we say “great”?) Of course, we meant “hungry”?

But a listed company, which is also about growth, but on the side, but also on such untimely KPIs such as “cost”, “profitability” or “Cashburn” has to pay attention? We believe that the example of the Hamburg-based financial comparison portal Finanzcheck, which was sold to Scout24 for around EUR 275 million last summer, can be answered. Because the 2018 figures (which we have taken from the Scout24 Annual Report) do not seem to correspond to the “growth goes over everything” premise of the previous year. But see for yourself:

Two hints in advance:

1.) Smartphone while reading the text best cross. In retrospect, we have arranged the text in three columns.

2.) On 27th March, at 10 am: Scout24 disagrees with our analysis of sales. More on this below.

Turnover According to a presentation that Scout24 showed its investors in the course of the takeover, FinanzCheck’s turnover in 2017 exploded by 37% to 35.7 million euros. The year before, it had already been 34%, so also a lot. For the financial year 2018, there are three indications of the turnover of Finanzcheck in the Scout24 statement:

1.) In Q4 the credit comparison portal converted 9 million Euros, extrapolated to the year of 36 million Euros.

2.) Calculated from 1 September (since Finanzcheck was included in the scout figures) the Hamburg salaries 12.3 million euros, annualized so 36.9 million euros.

3.) If Finanzcheck had been consolidated as of January 1, the revenue contribution would have been 38.2 million euros. Means: financial check has grown last year only by 7%, and the direction of the end of the year, even with a presumably decreasing trend Cashburn.

To the 2017 loss of Finanzcheck, the presentation was not. In the Federal Gazette, however, the 2016 financial statements are now visible. This shows that the annual deficit for the year was € 9.9 million. The 2016 figure is fairly similar to the contribution that Finanzcheck (which would have been consolidated as of January 1) would have contributed to Scout’s 2018 after-tax earnings, namely, minus € 9.7 million. We would strongly suspect that most of the cash was burned in 2017.

Marketing Lack of 2017 numbers we look again in the 2016er graduation. Marketing expenses amounted to 20.5 million euros, compared to 17 million euros in 2015. By contrast, since its consolidation (ie since 1 September 2018), Finanzcheck has spent just 4.9 million euros on marketing, extrapolating on the full year just 14.7 million euros. On this basis, we would assume that the advertising expenditures reached their peak in 2016 and 2017, but at best was at the level of 2015 in 2018 (rather even a bit below)

Inserted on March 27, 10 am: Scout24 disagrees with our analysis of sales. Justification: The consolidated 2018 figures for the financial check from the Scout24 annual report are not directly comparable to the former stand-alone figures of the fintech. Following a presentation by Scout24 (here the PDF, see page 22), growth is 2018 i.d.T. only decreased from 38% to 22% and not, as we concluded, from 37% to 7%.

Unfortunately, we do not know exactly what the revenue-generating “Pro Forma Reconciling Items” are, which is what the Scout24 presentation is all about. Even the balance guru, whom we always consult in complex cases, does not know, although he always knows everything else. Let us try to clarify.

Also published on Medium.

Published inFintech

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