Start-up bank Vivid on the way to profitability

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According to company co-founder Alexander Emeshev, the Berlin smartphone bank Vivid Money is well on the way to moving out of the red. “It is estimated that in less than two years, in about twelve to 24 months, we will reach the first profitability threshold,” said Emeshev of the German press agency. Until then, his company will pay for ongoing operations, customer care and other operational expenses from current income.

Like the largest German fintech company N26, Vivid is one of the so-called neobanks that want to turn the banking business in Germany upside down. Start-up companies in the financial sector usually accept years of loss in order to assert themselves in the market.

Vivid Money has been active in Germany since 2020, as well as in France, Spain and Italy. In April, the company raised 60 million euros in a second round of financing, mainly from US venture capitalists, to compete against neo-banks such as N26 and Revolut, but also against traditional institutes and direct banks. Vivid also competes with online brokers such as Trade Republic or the Berlin-based crypto currency specialist Nuri (formerly Bitwala).

Compared to N26, Vivid pursues a different strategy in Germany. Instead of applying for its own banking license, Vivid relies on the services of Solarisbank, which does not intervene in the end customer business itself, but acts as a specialist in banking-as-a-service. For this, Vivid not only offers a checking account, but also enables customers to trade stocks and crypto currencies. Vivid is cooperating with the Munich-based financial institution CM-Equity.

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Vivid aims to get a maximum of 20 to 30 percent from a single source of income, Emeshev said. In addition to interbank fees, the proceeds from a premium service, share trading and the crypto segment. “So we don’t put all our eggs in one basket.” The profit forecast for the next two years does not include the costs of growth – i.e. possible acquisitions or the teams that develop new products. Vivid aims to achieve this second profitability threshold by 2024 or 2025.

Emeshev emphasized that profitability in business operations is important. “From this point on you no longer have to rely on investor money, because you can stop the paid acquisition and become profitable immediately. So we are only asking for money to accelerate our growth. We do not have billions to burn a lot of money. ” Vivid wants to be a brand that constantly delivers new values. “That’s why we keep releasing new app updates, sometimes three times a week, to improve every single feature a little.”


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