"We assumed the worst case scenario"

Tamaz Georgadze deliberately expanded his start-up Raisin to the neighbouring island in times of the Brexit. This took not months, but years.

The shock was still deep in Europe, in Britain anyway, when they decided on Raisin's next expansion. When the British had just decided that they were going to leave the European Union, shut themselves off and put economic relations with EU members at risk, Raisin's management team in Berlin fell into actionism and made a momentous decision: now we want to go to Britain.

At this point, the start-up Raisin, which is best known in Germany under the brand name "Weltsparen", had already been in existence for four years. On its platform, the fintech brings banks from all over Europe, which are looking for money and offer interest, together with savers who would like to have a few more percentage points of return on their savings. Savers currently get up to 1.8 percent, for example, if they invest their money for ten years. Shorter terms also bring lower returns. Deposits of up to 100,000 euros are protected by the European Deposit Guarantee Scheme, as Raisin assures. The Berlin-based start-up has already brokered more than 27 billion euros between banks and savers. In 2016, the year of the Brexit vote, the figure was just under two billion euros. Raisin itself earns a commission on the brokered deposits.

"The UK market is the most important for us, next to Germany."

Tamaz Georgadze, Co-Founder Raisin

What drew him to the island, as founder Tamaz Georgadze puts it today, is that the UK has two advantages: "Firstly, people there are used to comparison portals, which makes it easier for us to get started. And secondly, the UK is a huge market with a lot of potential for an intermediary platform like ours." What he means is that most people see the UK as a sector with a few big banks like Barclays, HSBC and Lloyds. But he says there are dozens of smaller money houses with individual licences, specialist banks that consumers know little about and foreign banks licensed in the UK that need to refinance. "All these money houses we saw as potential clients," Georgadze says today, four years later.

Britain was new territory for Raisin. Almost all banks previously issued their offers in euros. But in the UK, banks logically issue deposits in pounds, a currency that is otherwise less important in the world than, say, the US dollar. "Going into a closed currency area for the first time was of course a big challenge," Georgadze says today.

And then there was one thing no one could calculate: the Brexit. What if Britain leaves the EU without a trade deal? What if economic ties are cut to a minimum? And what if cross-border service providers suddenly found it harder? Georgadze remembers well the worries they had. There was only one tactic to solve this, according to the founder: "We assumed the worst case scenario. That way we could be sure the project would work even if the UK completely shut down."

In 2017, Georgadze therefore struck directly. Raisin bought the financial services provider PBF Solutions and with it a team of 15 people in Manchester, including all the necessary licenses, for a sum believed to be in the seven figures. He wanted to hedge his bets should the UK largely curtail its relationship with the mainland or make it difficult for companies from Europe to operate on the island. A so-called "slow start" in the U.K. followed shortly thereafter in 2018, and Raisin has been on a growth trajectory since 2019 at the latest.

20 banks are currently connected, one to two are added every month, according to the start-up, and by the end of 2021, there should be just under 40 to 50 financial institutions that accept the deposits of savers via the UK platform. But Georgadze is silent on how much revenue or even profit Raisin will generate there. Only this much: "The UK market is, next to Germany, the most important for us and will become even more important in the future."