"The big ones have lawyers, the little ones have hope".

The German economy could soon be facing a wave of insolvencies, partly because many companies ignore early indicators. A fintech from Worms wants to help companies identify difficulties before they become acute.

At first glance, Frank Horvath's and Werner König's idea sounds a bit like SAP light. In the fall of 2020, they went to market with their app Finanzgeek, a tool designed to enable small businesses in particular to centrally manage their finances, accounting and project management.

But what Horvath and King have come up with is meant to be much more than just another management tool. Their app is meant to detect and indicate impending insolvencies early enough that companies can still take countermeasures - a feature they're probably right on time with.

In March of this year, the Institute of the German Economy saw around 5,000 so-called zombie companies in Germany, i.e. companies that are only not yet officially bankrupt, partly because they do not have to file for insolvency due to the corona crisis. According to the institute, small companies and sole traders in particular are at risk of a delayed wave, with insolvencies among them in 2020 a whopping 29 percent down on the previous year.

Both Horvath and König are experienced business consultants, Horvath in data and restructuring, König in software. The two have been in the market since the fall with their app Finanzgeek, a tool designed to enable small businesses in particular to centrally manage their finances, accounting and project management. "We are primarily targeting companies with up to 49 employees, such as craft or cleaning businesses," says Horvath. This is because companies of this size in particular are often not very digitized and if they are, they use a lot of different solutions. "We want to become a one-stop shop for them," Horvath says.

But the special twist on Finanzgeek is the Smartguide: the tool that gives companies an early warning when trouble is on the horizon. "I've been analyzing bankruptcy data for 17 years, and the early indicators of one are actually always the same," Horvath explains. Often, he says, there are initial signs years before the actual insolvency, so it is possible to take countermeasures in good time if these signs are recognised.

Finanzgeek relies on artificial intelligence, which collects various figures and analyzes them in a risk weighting. Which numbers are important varies from industry to industry, Horvath says: "In retail, for example, it's sales per square meter, elsewhere it's more the ratio of productivity to cost of goods." Customer and employee satisfaction also play a role, he adds. He is convinced that small companies in particular could use such an early warning system, as they often lack the professional advice that large corporations have: "The big ones have lawyers and tax advisors, the small ones mainly have hope."

Horvath carried the idea around with him for a long time; in the end, it was a long car ride with his co-founder that provided the initial spark. "Werner König and I are neighbors, we both wanted to go to a blockchain conference in Freiburg," he recalls: "There I described the idea to him, he was immediately on board." In the beginning, there were two developers on board, but they left in the meantime, according to Horvath's recollection completely unexpectedly: "Suddenly we were faced with a fait accompli and briefly considered whether to continue." In the end, the two of them finished the project anyway, without the original partners and also without outside financing. Only their own money went into the startup.

The Finanzgeek app is free, but a desktop version is to be added soon, which will then function according to the freemium model: In principle, free to use, but if you want to have all the features of the AI, you have to take out a subscription. Currently, the company is planning three levels, between 9.99 euros and 29.99 euros per month, says Horvath. Whether they are aiming for profitability in the near future or whether Finanzgeek wants to grow first, he is not sure yet. "We are currently talking to investors. If someone were to say: 'Grow first, profit is not so important to me‛, then we would like that."

Horvath plans to add more tools to the Finanzgeek offering by the end of the year. And while the founder is trying hard not to come off as a crisis profiteer, he's certain that the impact of the pandemic will turn many companies into his customers. Especially because Finanzgeek is cheap in and of itself, he says: "That's what companies like to fall back on in times of crisis."