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The story of the Fintechs who waited 10 years for the breakthrough: The Traxpay case

We share an interview with Markus Rupprecht, the founder of the Frankfurt fintech, Traxpay:

Mr. Rupprecht, your company, the Frankfurt Fintech Traxpay, has landed after our information, a pretty big deal. They have won the retail giant Edeka as a customer. That’s right, right?

Almost. In addition to the nationwide central unit, there are also the Edeka regional companies. But our customer is first of all the Edeka headquarters …

Well, still fat. But one has to say that Traxpay, if we have followed this correctly, has never acquired a larger customer except Edeka. And that, even though your company was founded in 2009.

I want to contradict that. What’s right: There is the “old Traxpay”, which was involved in B2B payment – and had customers such as EOS or Flightright, so well-known names. Unfortunately, we did not grow as fast as needed for a startup. That’s why we shot our business model in 2016 and actually started all over again. Since then, we have won quite a few smaller B2B customers again. But, and you are right: none of the weight class in which Edeka plays.

Without wanting to provoke you now: For us it sounds as if you had to wait ten years for the breakthrough …

But you can also do it the other way around: The “new Traxpay” is just over two years old. And thanks to Edeka, our business case is experiencing an acceleration that is very unusual for a young financial startup! Even if you say now, we are not a young, but an old Fintech …

Before we come to the “new Traxpay” and to the question of how their new business model since the Pivot ever looks – you can tell us a little bit about the “old Traxpay” and the question, why the Pivot was necessary at all?

You’re welcome. Where should I start?

Quiet with where you come from your own professional.

Okay. I am a banker by design, and I worked at Deutsche Bank for about ten years, first as a credit analyst. When I did not want to break down any balance sheets, I switched to payments in 1997, long before the topic became sexy. Then came the New Economy, and I set up a department within Deutsche Bank to advise large e-business customers. That was a very fruitful, highly profitable business back then.


Seriously. The department was supposed to be sold, so I left in 2001. After that, I first did a sabbatical in a Chinese monastery, then worked as a consultant for a few years, before founding Traxpay in 2009.

With which business idea?

How well do you know about corporate banking?

Goes so

So, if a company makes a transfer, then it must enter the purpose of the transfer in the subject field. This is no different than with the private customer, except that the private customer usually gets along easily with the space in the subject line. He then enters something like “rent July 2018”, and everything is fine. But when a big customer transfers money to a supplier, then it’s not just about a bill, but it’s sometimes like hundreds of bills, which are paid with this one transfer – and then there are disputed bills including, where the Customer, for example, only 20% deducted, because he had any complaints or something. There is a lot of information hidden behind a transfer, but of course not all of them fit into a subject field of 140 characters. But: It then needs parallel manual rework, which causes insane process costs.

And you wanted to develop a tool with which this information can be reproduced, so to speak, via the transfer?

Something like that, yes. I was already very far with that. The idea then found the interest of SAP. The then CEO said: “Okay, to finance an ad-hoc invoice is not worth it if the allocation of the individual invoice items required for this costs between € 30 and € 80. But if it succeeds to automate this assignment, then that is almost a revolution. “Anyhow: I was then able to introduce the idea to various large customers of SAP, and there was the interest in such a solution considerably.

After that, but something must have gone wrong, and indeed tremendous. Otherwise the pivot would not have been necessary at some point…

It happened, which often happens at startups – it was different than expected. I’ve negotiated with SAP about joining Traxpay, but was a little bit scared that such a big corporation would flounder once it’s in – that was long before German corporations had their own startup programs, accelerators and incubators. Then there was the idea to bring in a venture capitalist at the same time in order to better balance it out. That, too, has been shattered.

That sounds like: they wanted to do it alone without SAP – and then they failed.

Well, at least I thought that companies would be interested in my product even without an intermediary like SAP. But this assumption has proven to be a bit naïve, I must concede in retrospect. The doors, which had opened in the meantime, were then closed again. That was all then, before the term “fintech” even existed.

At the beginning of 2012, Munich-based venture capital specialist Earlybird joined Traxpay instead. Soon afterwards, that is also documented, the CEO was suddenly no longer Rupprecht, but that was any American. And in 2014, you were completely eliminated from Traxpay, according to the commercial register.

To put this entire phase into two or three sentences: The idea of VC Page was to entrust the management of the company to an external manager. I should focus on the product instead. That did not really work in this combination. So I pulled the consequences for me and left Traxpay.

There was then a phase in which the company was quite present in media. At the end of 2014, there was a report that Traxpay had received the equivalent of $ 15 million in funding from reputable investors – including Commerzbank. One year later, her successor was even voted “Best CEO in the Financial Technology Industry 2015” by “European CEO Magazine”…

If you researched this, it will have been like that. Is always the question of what such awards in real business are worth …

In fact, the story of success told at the time does not seem to be quite congruent with reality. After all, there was a fair deal on the investor side in 2017, which is also documented publicly – ie a financing round in which the existing shareholders were largely watered down. The majority was now Family Offices, whose name we honestly never heard. And at the end of 2016 you suddenly became CEO again.

Here we are now with the Pivot, which finally led to a turnaround. At the time, Traxpay, with Jochen Siegert as COO and Thomas Fuhrmann as CTO, won very good managers for the operative business. In Siegfried Heimgärtner, the former Skrill CEO, there was also an excellent chairman of the supervisory board for the change. In this constellation, I was then convinced to return to the CEO post and venture together with the team a new start. Let me put it this way: In the Berlin startup scene, the company would have gone bankrupt and would have just started fresh with the new idea. This was not an option in the B2B banking sector, where trust is very important. Instead, the company went through a difficult period during the pivot. And the Family Offices were donors who believed in us and our new topic – and so in 2017, despite the tense situation, there was another round of financing that led to the washout you mentioned.

Let’s talk about her new topic: In October, we did an article on “” titled “The ultimate lesson about the battle between banks and fintechs”. The piece was about Deutsche Bank’s plans to establish an international marketplace for trade claims. And then we counter-cut which fintechs already exist in the field and what they do.

I read that

Traxpay also appeared in the play on the edge. After all, your company no longer only provides the information it needs to pre-finance an invoice – that was your original idea for 2009. But you are now a so-called “supply chain factoring” platform. That means: Traxpay should now run the entire financing process – which makes you suddenly interesting for a giant like Edeka.

Right. Traxpay sees itself as an overarching platform that intends to provide both customers and suppliers with all common forms of invoice financing.

However, the pioneer in the Beritt is not Traxpay, but these are the US-based Fintech Taulia, founded by Germans, and another US player with a strong German connection, namely C2FO with the large investor Allianz behind it. And then there is also a fintech in this country like CRX Markets, which already has one or two prominent customers. And another Traxpay competitor, Trustbills, is backed by DZ Bank and Deutsche Bank. What sets your approach apart from that of competitors? After all, at bottom you are all concerned with the – in ultraneudeutsch terms – the platforming of the factoring business.

For outsiders, the differences are actually in the details. Do I come as a platform more about the supplier who has an open claim against his customer? Or do I go about the customer who is ready to settle this claim if the supplier comes to meet him? These are points from which the different models are derived. One thing, however, is common to most platforms: they want to replace the bank as an intermediary. And here’s our approach is a bit different: we take the path through the banks. They are our cooperation partners.

Although there is only one bank that cooperates with you, namely the NordLB.

No, there are others, even big ones like LBBW – even if that has not been communicated publicly. We are currently close to finalizing our first international cooperation. But what’s right: Our first banking partner was NordLB

And what role does a bank such as NordLB play in your model?

Like the other banks, she is our product supplier and sales partner who, for example, paved the way for the pitch for Edeka and, of course, built up the necessary trust there.

In other words, NordLB does the sales for you, and you are now doing the business…

That’s not how it is, of course. On the contrary, on the one hand, the Bank is strengthening its relationship with its customers by cooperating with us instead of being marginalized in the working capital business, as is the case with other platforms. Secondly, with the consent of our clients, we share with the banks all the information we collect on financing – which is very valuable to banks. And third, of course, we’re making a revenue share. And these commissions, believe me, are extremely interesting for banks in these times.

Published inFintech

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