20VC: From Selling 75% of Trade Republic for €600K to Raising $1.3BN at a $5.3BN Valuation, The Biggest Fundraising Lessons Having Raised $1.3BN From the Best in the World; Trade Republic CEO, Christian Hecker and Creandum General Partner Johan Brenner

Christian Hecker is the Founder and CEO of Trade Republic, the company making it easy and inexpensive for everyone with a smartphone to invest. To date, Christian has raised over $1.3BN for the company from the likes of Sequoia, Founders Fund, Accel and Creandum to name a few. Previously, Christian worked in Bank of America Merrill Lynch’s Investment Banking department. Johan Brenner is a General Partner at Creandum. Johan has led Creandum’s investments in iZettle (acquired by PayPal for $2.2bn in 2018), Trade Republic, Klarna, Pleo, Neo4J, Vivino and more. Johan was previously a repeat entrepreneur, founding one of the first online brokers in Europe in 1997 (sold to E*TRADE in the US), then JobLine (sold to Monster), Bookatable (Michelin) and Tradera (Ebay). In Today's Episode with Christian Hecker and Johan Brenner We Discuss: 1. Selling 75% of Trade Republic for €600,000: How did Christian come to sell 75% of Trade Republic for €600K? How did Johan and Creandum solve this challenge when they invested? What are some of Christian's biggest pieces of advice on cap table construction? 2. Raising $1.3BN From the Best Investors in the World: What are Christian's biggest fundraising lessons from raising $1.3BN from the best in the world? How did Doug Leone and Sequoia come to lead Trade Republic's round? What was the meeting with Doug like? What questions did he ask? How did it go? How important of a skill does Johan believe being a great fundraiser is for founders? 3. Scaling into Europe's Next Decacorn: What are the single biggest issues that arise when scaling so fast? What breaks first? Does CAC increase with time or decrease? Why did Christian decide to stop paid marketing on Google and Facebook and stop spending $100M+ there overnight? Why is Christian so bullish on influencer marketing? What works? What does not work? 4. Europe: A Hub for Innovation or a Retirement Home: Does Christian believe that young people in Europe work hard enough? What are the biggest challenges to scaling teams in Europe? Why does Johan believe the biggest challenge in Europe is the lack of exit markets? What can Europe do to improve and increase our chances of being successful?

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  Between, I think, 2015 and 19, I met over 200 VCs. I was rarely invited and every time we were invited, we almost never saw the partner. Nobody really gets anywhere close to writing a term sheet. And then somebody said, well, you should meet this company in Düsseldorf in Germany. And we met them and they were very eager to invest, but they said, well, I think we have leverage. And so it's either this or nothing. And so we said, well, it's better to have a tiny shareholding of something big than a big shareholding of nothing. And so we did it and then we raised 600,000 euros back then and sold 75% of the company.

• 0:33Harry Stebbings?

  This is 20 VC with me, Harry Stebbings, and Trade Republic is one of the most incredible stories in startups. One of the fastest growing companies in Europe, now having raised over 1.3 billion dollars from some of the best, including Sequoia, Excel, Founders Fund and Creandum, with their last round valuing them at 5.3 billion dollars. And today we sit down with their co-founder and CEO, Christian Hecker, and their early lead investor and one of the best fintech investors in Europe, Johan Brenner, general partner at Creandam. But before we dive into this incredible discussion, there's no shortage of helpful AI tools out there, but using them means switching back and forth between yet another digital tool. What was supposed to simplify your workflow just made it way more complicated. Unless, of course, you're in Notion.

• 1:17Harry Stebbings?

  In Notion, you can automate the tedious tasks like summarizing meeting notes or finding next steps, really freeing you up to do the deep work that we all want to do. And that's why Notion is used by over 50%, 50% of Fortune 500 companies. And teams that use Notion send less emails, cancel more meetings and reduce spending on tools. Try Notion for free when you go to notion.com/20vc. And speaking of amazing products like Notion there, I'd like to talk to you about a company called Digits. They're a full-service AI accounting company. And if you're in need of an accountant or looking to switch, there's no better solution than Digits. Starting at just 350 dollars a month, which is less than half of what you'd pay a traditional firm,

• 2:01Harry Stebbings?

  Digits is the most accurate, most efficient solution on the market. They've developed proprietary AI technology that automates tedious financial tasks.

• 2:10Harry Stebbings?

  And delivers reports for the actual close of the month, not two to three weeks later as always. And they also allow you to keep track of key metrics like revenue, burn, cash flow and runway in an incredible live dashboard. The best part of all of it, this is vetted and signed off by their in-house CPAs. If you're interested, visit digits.com/20vc to claim your special offer today. That's digits.com/20vc. And finally, travel and expense are never associated with cost savings, but now you can reduce costs up to 30% and actually reward your employees. How? Well, Navan rewards your employees with personal travel credit every time they save their company money

• 2:52Harry Stebbings?

  when booking business travel under company policy. Does that sound too good to be true? Well, Navan is so confident you'll move to their game-changing all-in-one travel corporate card and expense super app that they'll give you $250 in personal travel credit just for taking a quick demo. Check them out now at navan.com/20vc.

• 3:12Speaker 02

  You have now arrived at your destination.

• 3:15Harry Stebbings?

  Guys, I am so excited for this. I've heard so many wonderful things in doing the referencing for this show. So first, thank you so much for joining me today. Thank you, Harry. It's great to be here. Yes, same. Thanks. Great to be here. And we're good listeners, so looking forward to be in it. Well, that is very, very kind of you. So I want to start with just a little one-minute intro from each of you, just so the audience can get familiar with your voices. So Christian, why don't we start with you and then Yorn, over to you.

• 3:39Speaker 00

  Sure. So it's Christian, one of the co-founders of Trade Republic. We started that journey, I think, nine years ago. Before that, worked in the investment banking and before that actually studied philosophy. So no clue how I ended up here, but it's a lot of fun.

• 3:51Speaker 02

  I'm a venture capitalist. I'm a partner at Creandam, which is an early-stage investor primarily in Europe. I started my career in big companies, became an entrepreneur. My first company I started was actually an online trading outfit that I sold to E-Trade 20 years ago. I've started my career as an operator, became an entrepreneur, and then joined actually benchmark in Europe 20 years ago, actually to the date. And joined Creandum a few years later and been with Creandum for fifteen years.

• 4:17Harry Stebbings?

  I do these schedules and they're completely pointless because I never stick to them. So I'm just gonna not bother. You mentioned there just like E-Trade, Johan, and like when you know an industry so well, it's so easy to think that actually, oh, I know everything and that's like not a good industry. Or you have these preconceived ideas. Did you have preconceived ideas when you first met Christian?

• 4:37Speaker 02

  Well, actually I did. When I met Christian, I fell in love with him and his team and what they were doing. But my colleague came to me one evening in March two thousand and nineteen and said, we have this opportunity to look at a Robin Hood of Germany. Do you want to take a look? No, I said. So I said to myself, this has been around for twenty five years. I've done this before, nothing has happened. A Robin Hood is coming and Germans, they don't save anything else but in the mattresses. And then I woke up the next day and I said, hey, maybe there is something there. Bjark, why don't we take a corner with the team? And I did, and the rest is history. So I did have a preconceived idea.

• 5:13Harry Stebbings?

  I want to take a couple of years step back though, Christian, because it started in two thousand and fifteen. So can you just take me to two thousand and fifteen? You decided not to raise. If we start there in the early years, why did you decide not to raise in the early years from that two thousand and fifteen to two thousand and eighteen period?

• 5:30Speaker 00

  Well, of course. So I think first of all, it was never a really decision from us, right? So we tried to raise many times. So between, I think, two thousand and fifteen and nineteen, I met over two hundred VCs. I was rarely invited and every time we were invited, we almost never saw the partner. The usual story goes, they just cancel the meeting five minutes before and then you may meet an intern, you may meet an analyst. And then you're pitching to them a very simple idea, right? That you believe that there's a pension gap. People are going to invest, starting in Germany. You're twenty five years of age, you're gonna found a bank. And then everybody calls it bullshit, right? And says this is not gonna work. As Johan said, nobody wants to invest and it's heavily regulated and the potential is not there. And so nobody really gets anywhere close to writing a term sheet.

• 6:15Speaker 00

  And so during that time, we looked into alternative ways of kicking things off. And my co-founder, Thomas, he's a gifted engineer. Beginning, he would participate in hackathons, you know, those programming competitions. And he mastered the skill and he won every one he participated in. And so we won one of Commerzbank, like the German bank with the yellow sign. And they then invited us to join their so-called startup garage. So their internal accelerator, so to say. And so we moved to Hamburg and we spent one year with them to develop that idea. And they would give us some money. And then one day in early 2017, they would say, well, we will not back this. We settled against it, so we're done.

• 6:57Speaker 00

  And so then we bootstrapped the rest between 2017 and 19. And once we had our banking license and the first 10,000 paying customers, the VCs were all very excited all of a sudden and wanted to invest.

• 7:09Harry Stebbings?

  I have so many questions. One, what a mistake that was. That's in the thing, oh, fuck. My first question to you is, when you look back at those early days, when bluntly you were getting rejected by every VC and the analysts and the interns and you name it, was that your mistake in terms of how you packaged it? I think a lot of the things are product marketing challenges. Should you have packaged it differently or was it a VC class that just didn't like the product?

• 7:32Speaker 00

  If you fail, it's always your mistake, right? So you're not here to blame any other person. So I think in hindsight, yeah, obviously we improved a lot about how we present the company, the mission and how we understand our business. Let's travel back in time, right? 2015, Android Six just started, Revolut just started, right? So the entire idea of doing banking on your phone was quite novel and not really proven. Second, you're entering a market, Germany, where there's historically a very low quota of people investing in the first place, right? So only 10% of German invest. And then third, you have the idea to do commission-free investing in a heavily regulated market and you get this huge entry barrier of getting a license in the first place. And I think this three points altogether were a bit too high.

• 8:14Speaker 00

  But we've been so motivated because we really believe that there is a pension gap. So meaning that the statutory pension system we have in continental Europe is inherently broken and that thesis suggests that basically in the next 20, 30 years, millions of people are going to start investing. And so that idea kept us going.

• 8:31Harry Stebbings?

  What did you tell yourself when you got continuous no's? You know, we have over 700,000 founders that listen and I'm sure many of them get many no's. What would you say to them and what did you tell yourself?

• 8:41Speaker 00

  Well, we never tried to think about the big thing. If you would ask me back then, was it my aspiration to build a unicorn? No. We always told ourselves that as a brokerage business, you can be very profitable. Meaning with eighty thousand, hundred thousand clients, you can be a small profitable salary paying company. And that idea sounded much more feasible than just founding this behemoth with like multimillion clients. And we started very small, so we built a trading competition for students. So we took our money, we bought a few iPads and we went to universities and we would make this training competitions where they could simulate the stock market. Right? And all of a sudden, we had fifteen thousand people using the product overnight. And obviously these things motivate you and keep you going.

• 9:22Harry Stebbings?

  Johann, I want to ask you, you know, it's a really hard thing for founders because like Christian said there, we didn't think about like building the billion dollar business in that way so aggressively. And it was kind of the next thing, the next thing. But then investors want to hear the billion dollar, the pitch that makes it, you know, a huge outcome for everyone involved. How do you advise founders pitching between this is how we accumulate value sustainably versus pitching the big vision? And what do you prefer?

• 9:49Speaker 02

  I think you've got to have some kind of vision in there, but I like better realistic founders than exuberating founders. But it needs to be a part of the vision there. And I think one of the conversations I, Christian will ban me on this, but he says, you asked me so many times how I can become a billion dollar company. And actually I think I did. That was the most challenging thing, right? How do you make the equation? Germans don't save too much in equity instruments, payment reward of low house, that's going to be sustained, et cetera, et cetera. So that was one of the biggest questions.

• 10:18Harry Stebbings?

  If we fast forward a little bit, unbelievable stat here, Christian, that you sold seventy five percent of the business to an angel investor. Can you just take me to this? What happened and how did that pan out?

• 10:30Speaker 00

  Right, so again, going back in time a tiny bit. So we started with like Commerzbank and they will give us some money, we had employees and stuff. And then they basically pulled the plug. One Sunday, we would lay off eight people, unfortunately, and we moved to Berlin and we bootstrapped from that onwards. And during the time, as I said, nobody would give us really money, but we got this trading competition going, the first traction and. People would use the app. And so we looked for alternative ways of funding the business. And then we met many people who again rejected it. And then somebody said, well, you should meet this company in Düsseldorf in Germany. It's like a small, high-frequency brokerage company called Sino. And they are entrepreneurial, they understand the thesis, and they have the guts to do it. And we met them, and I think they saw the potential.

• 11:13Speaker 00

  And they were very eager to invest, but they said, well, I think we have leverage. And so it's either this or nothing. And with that, okay, well, we're three years in. We have the confidence we can build it. We've seen at Commerce Bank what is required, and we can do it. And if we get to the point where we have maybe the first hundred thousand customers, it will go somewhere. And so we said, well, it's better to have a tiny shareholding of something bit big than a big shareholding of nothing. And so we did it. And then we raised six hundred thousand euros back then and sold seventy five percent of the company.

• 11:43Harry Stebbings?

  Six hundred thousand euros and then seventy five percent of the company. What happens then? Because that seems like quite a broken cap table that's almost insurmountable. I mean, Johan, obviously, is both venture messes like, oh.

• 11:54Speaker 02

  So what happened was vulnerable. I took that call with Christian and Thomas that morning afterwards. Then they had refined their pitch to world-class. It was one of the best pitches I ever saw. But more importantly, they had built a full stack. And they've thought about every single banking detail to be able to scale this business and keep to have low transaction costs, et cetera, all the things that you want. And then we flew down and met them in Berlin and said, hey. First of all, they build a great product. They have some, you know, a thousand or a couple of customers, so very early. But they're engaging a lot in the app. So they show all the right trends and engagement metrics. And more importantly, I think, we realized that, hey, maybe there's a shift in time now. Maybe there's a transition with the new generation of savers.

• 12:37Speaker 02

  They are going to have to mind to save the pensions. So we realized that. And then we fell in love with everything that we saw, the team, the product, et cetera. And of course, we looked at the cap table and said, Jesus, how are we going to manage this? In the end of the day, you want to make sure that you invest in a good as possible cap table. And of course, going from twenty five percent ownership of the founders to something else is extremely difficult. And most See probably, you know, not take that challenge. But we tried and so we had several meetings with the seed investor. Explain that I think that's best for this company, for you and us as possible investors and for the founders and everybody coming afterwards. That we have a cap table that's more founder friendly. That's what we tried to do and eventually it's tough, right?

• 13:22Speaker 02

  And I must say, we handed all to the angel investor that they accepted to make that transfer and mechanism work. But we didn't make it work in the end, but this was actually a deed breaker for us in the end. Cause we really wanted to see Christian and the team own enough to be able to have sufficient as a founder to stay with the company long term.

• 13:40Harry Stebbings?

  How did they respond? That's a difficult conversation to have.

• 13:44Speaker 02

  Yeah, of course, they didn't like it at all. And the first call was rather tough and the second maybe a little bit easier. And in the end of the day, I think they understood it. I think if you ask them today, I think they are happy with how we did and restructure it. Because Trade Republic has been a fantastic story and development for all of us that took part of the company since then.

• 14:02Harry Stebbings?

  Can I ask you, Christian, on the flip side, on the founder side, having gone through that process? What would be some of your biggest piece of advice to founders when thinking about building out your early cap table? The dangers, what to do, what not to do, and how it changed your mindset?

• 14:15Speaker 00

  Most of the time you don't have a choice, right? So I think you all see this obvious advice. You want to work with great individuals and superstars and broad capital, blah, blah, blah. But to be honest, nine out of 10 founders don't have a choice at all, right? So basically take what you can. And I think the second one is, I'd say in hindsight, back then we were in for really the entrepreneurial journey, meaning building that product, right? The rest we really didn't care about. So we were never motivated by money. We were never motivated by big numbers, right? We really wanted to build this product and to make it work and to have something which is actually there, right? And that fairy tale kind of kept you going through all the ups and downs of that journey, right? I'd say in hindsight, raise as little as you can, at a reasonable valuation and just really try to build something which has defensible modes, which is unique and which has a true value proposition.

• 15:00Speaker 00

  Because to be honest, the moment we had the banking license, the moment we had the first 10,000 customers, no investor I met, the ones invested and the ones who didn't invest, nobody ever questioned product market fit after that. Right, so it was incredibly obvious to everybody. If you make trading for free in a great looking app, people will use it. It's going to be successful. But to come to that point where you have all those modes and it's defensible, that took the initial conviction and the initial entrepreneurial journey. And for that, we just wanted to have people who understand the product and to help us on the journey.

• 15:29Harry Stebbings?

  Johann, what risks were you underwriting when you did the deal? When you were analyzing this, what were you like? These are the question marks we have, which we are not sure about yet.

• 15:38Speaker 02

  Market looked great, but is it really there? Do you have to steal customers from somebody else? Or can you get into new generation of savers that will join the platform at scale? Can you build an international product and can work in other countries than Germany? Which is, this is a difficult, because it's regulated, it's tax driven in many countries, et cetera. Will payment for order flow be sustainable in Europe over the long term? If it's in the medium term, it will be okay for the company because we will always find revenue sources. How can we get satisfied BaFin, which is one of the toughest FSAs, bank authorities in Europe? And they just had Wirecard, which wasn't a great incident.

• 16:17Speaker 02

  And how can you build sufficient structure and team in order to make sure that you operate under the regulation? Because it's financial services, it's savings, it's about trust. So those were the things that we thought about the most. And of course, how do you efficiently acquire customers? The KAKLTV is of course a very important subject, but we can come to that later because everything went better than we planned.

• 16:40Harry Stebbings?

  Fuck it, let's stay on it now. I love KAKLTV. But I always wonder with like KAKLTV, does it get cheaper over time to acquire customers? As brand increases, as word of mouth increases? Or does it get more expensive as you saturate core market and you expand into ancillary markets, which are maybe less obvious customers? Open to everyone. I'm just always thinking about this question.

• 17:02Speaker 00

  Well, I think initially, the idea obviously is that it gets more expensive down the road, right, that you penetrate a niche audience and from that it gets expensive. And I think this is where maybe the question mark is coming from and we had the same, obviously. I think in hindsight, what we underestimated is that if your next best competitor has 10 bucks per trade and you offer something for free in an app with a German banking licence, right, the word to mouth growth is something you can just not predict and imagine. So it's still today, we get 65% of customers for free through organic growth and word to mouth. It's like a virus that spreads positively. And I think we saw the same. So basically, as Johan said, I think we overly underestimated how cheap we can acquire customers and how big the LTV is. Because another fact, which is a great pro and a contra in the European banking market

• 17:45Speaker 00

  is it's hard to acquire customers, but once you have them, they are incredibly loyal. Like, they don't really churn. So this is why your LTV is always higher than you initially expect.

• 17:54Harry Stebbings?

  What do you think is your core metric for success? Like, how do you define a successful user? The number of trades, the amount of times they log into the app? What is that metric which determines a successful user?

• 18:05Speaker 00

  Yes, and I think that's a very, very important question, fundamental question for Trade Republic, because many people confuse us to Robinhood and you think you're just a trading company. And if you follow that thought, I would look into trades per customer per month, maybe, right? And actually, we're not looking into it at all. So when any product manager comes to me and suggests that we should an engagement campaign helping people to invest more, more often, more frequently, we don't do it. We don't. Because we believe we want to help people to accumulate wealth. Now, how do you predict this? It's by monthly recurring deposits. So basically, we tried to optimize to have as many young people putting in money monthly into the product. And so this is a core metric. So eventually, if we go to the board, the first number we talk about is assets, total

• 18:46Speaker 00

  assets. The second number is recurring deposits over time, because we believe that's the biggest predictor for sustainable activity. Because I'd rather have millions of people doing little business over the next 30 years recurrently, than a lot of business during GameStop and then they're gone with the market flags.

• 19:01Harry Stebbings?

  When you look at Bluntney, the audience that we have with Trade Republic, it would be on the younger end, I imagine, and the lower wealth end. How does one ever think about getting the 50 to 65, where they're depositing millions and millions, and taking them from very high-touch prestige services to Trade Republic?

• 19:21Speaker 00

  You don't. So basically, I think we want to have an incredible focus, which is basically having the most customers we can beneath, let's say, thirty, thirty-five years of age, depositing recurring money. Why do we do this? Look at Trader Public today. We have four million clients. The average Trader Public client is, let's say, twenty-eight, thirty years of age, right? This person already holds an average eight thousand euros with the account. Now, these people are gonna double or triple their wealth in the next five to ten years to come, right? Because as everybody knows from themselves, during the thirties, you accumulate the vast majority of your personal wealth. So if we can just grow with these people, you're gonna be the Charles Schwab, the UBS of Europe in twenty, thirty years. And so basically, we have this really incredible focus of the young people, recurring deposits.

• 20:03Speaker 00

  And obviously, during the journey, you get a lot of forty and fifty-year-old people down the line. Maybe that's what we're seeing today, but the core focus is still the young people.

• 20:11Harry Stebbings?

  This is really just going macro now, so forgive me for it. But like you said there about accumulating wealth in your thirties, certainly in the UK, people used to own homes and buy homes in their thirties. Now, the homes are so unaffordable, people just spend money on designer goods. It's why Bernard Arnault is one of the wealthiest mans in the world. And so actually, we are nowhere near as wealthy as our parents. We squander our whole wealth. Do you worry about actually a very different time today, meaning we're less wealthy than ever and we accumulate wealth less effectively?

• 20:42Speaker 00

  Yes, and I guess this is a conviction piece we must have in this play, right? So basically, the underlying thesis of Trader Public, and I guess coming from the US, coming from the UK, you don't understand the problem we have in continental Europe. So continental Europe doesn't have any incentivized, government incentivized way to do capital markets pension savings. So you just depend on the generational pension system, meaning you depend on the young people paying money into the system and old people getting money out of the system, meaning the guaranteed pension from the state is falling apart. And many, many people realize this right now. And I think this is a transformation we're believing in, and the transformation we currently see in the market, that a whole generation of young people recognizes, oh my gosh, I have a problem in twenty, thirty years. I need to save some money now.

• 21:26Speaker 00

  Trader Public today has thirty-five billion euros of assets because of that fact, because These young people deposit money on a monthly basis. And so, yes, we believe that over time this will happen. And maybe think about it differently. Today, a typical thirty, thirty-five-year-old is likely not married, likely has not a house, likely has not a car. So the disposable income is pretty high. And then to get a fraction of that as savings is not as unrealistic as it sounds.

• 21:52Harry Stebbings?

  Don't you find that fucking depressing? Right, you don't have a wife, you don't have a car, you don't have a house. Oh, great.

• 21:58Speaker 02

  At least you have a savings account with Trade Republic.

• 22:00Harry Stebbings?

  Yeah.

• 22:03Speaker 02

  But.

• 22:04Harry Stebbings?

  That's the advert, Christian. That is the advert.

• 22:06Speaker 02

  From an investor point of view, if you make it, if you get the product market fit right, if you have a great product, if you have a product that you deposit regularly in. Over time, it's like NRR is, there's no churn really. And you just build upon this asset base all the time. If you can deliver great savings products that is cheap and worthy for the consumer, they will join and over time you'll build a fantastic business.

• 22:29Harry Stebbings?

  How much of your like four million users, members, depositors, how much of that is their primary account? You know, when we think about, say, like your Revolut or your Monzo, who I know very well, that big thing or that kind of core unlock is we want it to be your primary banking account. How much is your primary depositing position for you?

• 22:46Speaker 00

  When we survey our customers, we see that they have forty percent of their private wealth with us. It's a KPI, no challenger bank comes anywhere close. So again, like the average account size is nine thousand, ten thousand euros. And this is the average. Basically, if you look at cohorts, which are with the company for two or three years, the average account size is twenty-five thousand euros. So imagine that, right? We have a thirty-year-old who has twenty-five thousand euros on his or her Trade Republic account, right? So we own a vast majority of the private wealth of these people. Maybe we're the first bank account for them when it comes to wealth. And I think that's a very, very important value proposition for the next three years to come.

• 23:22Harry Stebbings?

  What's the biggest hurdle? Is it getting them to make the first deposit? Is that the core thing that then locks them in? Because you've said multiple times and Johan just said they're about the zero churn. I'm just trying to understand why it's zero churn and is that core hurdle just the first deposit?

• 23:36Speaker 00

  Well, so the really viral product of TradePublic is the so-called savings plan, right? So you subscribe to an ETF basket, so to say, and you put in money monthly. And this is something people almost never really quit. You set up 200, 300 euros per month and you just deposit money with this savings plan. And it's a bit like a fitness club subscription, right? So you feel so guilty by quitting it, you don't do it, right? So I think this is what we're trying to do. We're trying to get people this free savings plan. And it comes with no strings attached. It's for free, you can cancel it anytime, right? But still, people don't do it. And I think that's the underlying current which is driving the business.

• 24:10Harry Stebbings?

  What's the revenue per user today? Am I allowed to ask that?

• 24:13Speaker 02

  You're allowed to ask, but Christian is very sneaky with numbers, but.

• 24:16Speaker 00

  Yeah, we don't change numbers.

• 24:20Harry Stebbings?

  Listen, I thought it was worth a go. Okay, so we have this theory, we have the banking license then that comes. We have the clear product market fit. And then obviously more VCs see the potential. Now it is 1.3 billion dollars. Can I ask you, and it's a broad one, so you can take it in any ways. What are one or two of your biggest lessons from raising 1.3 billion? From some of the best, including Johan, but then your Keith Raboy, Doug Leoni, John at TCV? What are some of those big lessons?

• 24:47Speaker 00

  Well, I mean, so first of all, I think we saw the two sides of venture capitalism, right? So the first four or five years where nobody touches you, where you've been rejected all the time, right? And then I'd say, yes, the second half, where we had the luxury of choosing with whom to work with, right? And I think any investor which we picked, we've built a relationship for over a year or two years, right? So all of them basically cover the company. We had multiple conversations, we spent a lot of time trying to promise and deliver. And then that led to these investments. So we would know the people very well before they entered the cap table.

• 25:18Harry Stebbings?

  How did the meeting with Doug Leoni go? I mean, the guy is special. How did that go? Just take me to it.

• 25:24Speaker 00

  So first of all, I think it's the peak of COVID, right? So physical meetings are not happening, right? And then Doug says, well, casually, I'm in Berlin, do you want to meet? And then we would meet on this hotel terrace, because at the peak of COVID, everybody is a bit afraid to meet, right? And so, yes, we were sitting down, it was freezing cold, on the terrace of an hotel and had this, I don't know, one or two hour initial conversation, which was 50% TradePublic, 50% my private life, and how I grew up, and what I'm about to, what motivates me, right? And I think that led then to a very great exchange over the coming month. And then luckily resulted into the investment. And obviously, we're very privileged to work with Sequoia, to work with him personally on the board. And he's somebody who's make you leave your comfort zone for sure.

• 26:04Harry Stebbings?

  How did the rounds change? When you think about the way that you presented, the vision that you presented, how did that change from round to round? And Johann, do chime here in terms of advice on what you coach founders in terms of how they need to alter their presentation from round to round.

• 26:19Speaker 00

  So I think in hindsight, if you, and we usually do it once a year, look into the pitch decks over the years, you see that our vision really gets bigger and bigger by every funding round, right? So there's a new layer added to it or a new like dimension added to it, right? I think in hindsight, that is a red line through all the pitches. And I think then we really found in every funding round, the next big thing, right? So obviously Johann was the product market fit. And then Series B with founders fund and Excel was the scaling in Germany, going deeper in the market, get really maybe millions and billions of assets. And then in the Series C with Sequoia, it was okay, let's take the German successful business to something which works across Europe, to different markets, that's quadruple the address of the market for the for the product. So you find these ten X reasons every now and then.

• 27:03Speaker 00

  And then on top of that, I think we really learned to work with many good investors, right? So divide and conquer, so not be dependent for anybody individually. And then second, obviously, raise as little as you can. We try to be thoughtful with valuation in all the rounds. So I think in every round, we could have easily raised something much bigger than we did. We're trying to optimize the really end journey and not the the step along the way.

• 27:24Speaker 02

  We did have the benefit of overachieving the plans. You sent me the other day, the pitch deck that Christian, and I looked at it. And, you know, in 2023, we're five X the plan that was presented to me on top line. And it's very seldom that companies develop that way. We have that momentum, so you know, luck and timing, but Series B was raised in 2020 on the back of COVID fueled business. But that was sustained as well. And then going into 2021, we raised another round. We've always had, touch wood, a bit of momentum behind us. And at the same time, I think we went step by step and refined the pitch on what we wanted to do. So that was all that. And I also want to say that Christian was very level headed in terms of. How much money to raise and what valuation, et cetera, and over time.

• 28:09Harry Stebbings?

  There's some US venture investors in particular, you know, Reid Hoffman, who says, you know, raise as much as you can when you can. How do you think about that, raise as much as you can versus the more disciplined approach to this is how much we need and this is why we're raising it?

• 28:23Speaker 02

  Well, that's a difficult conversation, right? Because founders wanna wanna raise sufficient capital, have minimum dilution, and at the same time, they get the advice that you shouldn't get too risky on valuation because it's hard to to grow into it. The the truth is somewhere in between, but I think at the pace where you have a business model that works, business unit economics that works, and you have money on the table that you can get some extra cushion and everything else works, why not take that little extra money to be able to execute on a rainy day? Now, if you can do that on valuations, that's okay. Why not? It's not so easy to just say, be careful with valuation, just raise the amount that you need. I think there is some merit to raising when you can.

• 29:05Harry Stebbings?

  I definitely agree with you. Are you price sensitive, Johan? I just did a show with two seed investors and they're like, no, the best seed rounds, you have to be price elastic completely.

• 29:14Speaker 02

  I think if we look back at all our all our investments and the ones that have been fantastic, they've all been expensive or too cheap. No, no.

• 29:21Harry Stebbings?

  How expensive was Trade Republic when you did it, Johan?

• 29:24Speaker 02

  Well, it was five, six years ago. It was cheap in today's world. It felt expensive at that time, given a thousand customers and an A round of 10 million.

• 29:33Harry Stebbings?

  Johan, do you think the best entrepreneurs are also the best fundraisers?

• 29:37Speaker 02

  I think so. Within fundraising, there's a lot that comes into that trade. It's about, you know, explaining your vision, being a great storyteller, be concise, to the point, listen, et cetera. So there's a lot that encapsulates, you know, great at fundraising. Even though as an investor, you're when you're on the the opposite side of that discussion, it's really frustrating. And I tell you, Christian is great at this. But you have to remember then as an investor that next time you're partners and you're on the same time, the same side. So greater fundraising is absolutely the number one trait of great founders.

• 30:10Harry Stebbings?

  Okay, you just said that, that you're on the same side when the next round comes. Most often you're not if you're also a very reserves-heavy model, which is why I don't like reserves-heavy models. I think that you have a real purity of your relationship by having a one-and-done, we're partnered, I'm going to get you your best round next time. How do you think about maintaining that purity of relationship when also you're a one-to-one and you're like, well, well, Christian, on the next round, I would like it to still be a little bit lower because I want to put in my extra.

• 30:40Speaker 02

  Honest answer, we never think about that. If the market tells us this is the valuation, this is the round, we try to participate in the winners. That's honest area. If that ever would come through and be true, we would not be in business.

• 30:54Harry Stebbings?

  I love it. Very rare that I get an honest answer on the show, so thank you. That's a great thing. Christian, you then decided to raise a round in 2022. Put in context, Robinhood was down 60% from their IPO price. I don't think there was a huge amount of love towards the market bluntly. Can you take me to this process and what you decided to raise at seemingly kind of the worst time?

• 31:16Speaker 00

  So I think we've been privileged in the years 2020, 2021, that we raised money where we never needed money, right? So we kind of had a cushion. But we also recognized that our business model has a so-called double whammy. So what does it mean? So if interest rates go down, capital markets go up, and so retail people trade more, right? And so your revenue explodes. At the same time, as you know, venture valuations go up and the market is much more interested in having high valuations, right? So that elevator goes up quite fast. And so when I or we saw first cracks in the interest rates and, okay, there was like this war situation in Ukraine, and it was a very realistic scenario that interest rates would go up quickly, we knew this elevator goes down quite quickly in

• 31:59Speaker 00

  the other direction. And so I think that experience kind of made us pretty aware that now's time to just really brace for another two, three, four years where you want to have all the money to Your competitors against the wall if you need to. And so we went out and Robin Hood was out, as you said, and because they've been a public company, you could take their quarterly earnings and we could go to investors, a very selected number of investors, which we saw as very complimentary what we have today, and show them that this is Robin Hood. Everybody thinks we're like Robin Hood in Europe, but look at the numbers. So they are churning monthly active users, they're churning assets, they're churning activity. At the same time, Trader Public has growing active numbers of customers, has growing assets and has new savings plans.

• 32:40Speaker 00

  And by the way, nobody is quitting their savings plan during that already struggling market timing. And then we ended up with OTPP, the Ontario Teachers Pension Plan, which is one of the largest pension funds on earth. And so they really understood it in a second, that this is more of a Charles Schwab wealth accumulation game than it is of a trading game. And so we've been very privileged to do around with them. And I think that was obviously the cornerstone of then now still pacing through the last two years and making the company bigger.

• 33:07Harry Stebbings?

  In terms of Robin Hood, there was a lot of rumours that they would come to Europe. How did you answer those? And I mean, they had confirmed plans to come to Europe, bluntly, so calling a spade a spade. But how did you respond to those questions? How did you feel about that? And what were the thoughts there?

• 33:22Speaker 00

  Obviously, we admire Robin Hood, right? I think they opened up the category and they did a tremendous job. Their culture is very, very, very relevant, right? At the same time, we never felt that they were so overlapping with what we're doing, right? I think, yes, if you look from the outside, it might be it. But if you look even on the pricing of Trader Public, a trade costs one euro. A savings plan is for free. So I think it's clearly where we want to notch people, right? And to be honest, our competitors are much more the traditional banks in continental Europe. And so we felt that even if they might come, there's a reason for those two companies to exist. But then at the same time, we knew from own experiences how huge the entry barriers are into the market in terms of regulation, in terms of product market fit, in terms of having a great quality product, right? For exchange trading.

• 34:05Speaker 00

  And so we've been never too nervous that they would come around the corner quickly and take Europe in storm.

• 34:11Speaker 02

  And going first to UK is a different thing than taking continental Europe. It's a different regulatory environment and UK is a completely different competitive environment because there are a lot more competition in the UK.

• 34:22Harry Stebbings?

  How do you advise founders to think about competition? Grow your own race or be very aware and be cognizant of them?

• 34:29Speaker 02

  If you should put a percentage there, it's about 75% mind your own business but keep an eye on competition, but never be too dependent on checking what other people's are doing, follow your own path. But you have to keep some eye on the competition to learn from, et cetera.

• 34:44Harry Stebbings?

  So with these rounds, Christian, you accumulate this board of incredible people. As I said, you've got Johan, you've got Doug Leoni, you've got Keith Roy, John Doran, Ontario. It's a lot of opinions on a board. In terms of board management, what have been your biggest lessons in terms of how to manage a board effectively?

• 35:01Speaker 00

  So I think because we had the opportunity to build with each and every member a personal relationship even before investing, right? I think everybody knew kind of what they're getting. So we stick to the plan and I think everybody appreciates that, which is this asset game of accumulating recurring deposits and stuff. And then again, I think, yes, we have these board meetings, but I have a really vivid relationship with almost all of my board members. Like, we talk on a monthly basis and we spend time. And so I think there's no surprises. Everybody sees changes coming and we're very transparent about things that work and things that don't work.

• 35:33Harry Stebbings?

  Do we send out the deck beforehand?

• 35:34Speaker 00

  Of course, yeah, yeah. Everybody can comment and should comment. We follow the same structure, it's very predictable. There's a monthly update, which is quite lengthy, and then when somebody has questions, we follow up. And whenever we see something not working, that's the first thing we share with people, right? So we rarely talk about the things which work well. We most often talk about the things which don't work well. And I guess over the years, it just created a lot of trust and reliance.

• 35:55Speaker 02

  I think also the board is very loyal. I mean, every individual is present, they come to the physical meetings, they're prepared, and every board is special and unique. But I think, given where people come from all over the globe, I think it's really impressive that everybody participates.

• 36:09Harry Stebbings?

  How do the best founders manage a board, Johan? You've worked with some of the best, outside of Trade Republic as well as with Christian. How do the best managers manage a board? And how would you advise them if they were listening to this?

• 36:21Speaker 02

  Every time, after every board meeting, how was this board meeting? What should we have done better? And it's always something to do. But I think the key points are to decide on what are the two or three points I want out of this meeting? And make pre reads around that comprehensive. So that when the board starts, you have enough information provided to everybody that you can actually have a fruitful discussion on two to three points and make a decision on them. That's hard to do, but I think that would be my primary recommendation. Make sure you decide what you want to discuss and make ample preparation for those subjects. And then I would say making sure that you prioritize time in a way that you have time to discuss

• 37:02Speaker 02

  and make sure that you don't fall into the trap of a lot of reporting and fact checking, et cetera, but rather focus on those subjects.

• 37:10Harry Stebbings?

  Christian, do you bring your wider exact team into the meeting?

• 37:13Speaker 00

  Yeah, of course. So basically, how we structure the meeting is we try to share the deck one week in advance. Likely it's three, four days. And then we always start with a founder only section where we talk very openly about what's good, what's bad. And then we invite the team and then we have like finance, product, operations, legal, whatever it's like on the agenda. And then these people come and present it independently. And to be frank, I prepare the board for what I like about my team and maybe don't like and where we have areas to discuss. And so everybody can, with that context, listen to the pieces. And then we wrap up again together in a small group without the team and discuss next steps. And that's working always like this for four years now.

• 37:49Harry Stebbings?

  How do you think about ensuring equal weight of voice? And what I mean by that is some people have large profiles. Some people have large voices. Some people are very opinionated. How European and English can I be in being conservative here? How do you ensure that everyone is heard, but no one has more weight than another?

• 38:08Speaker 00

  Well, I think naturally over the years, you anticipate the things, questions and points, which usual people do, right? So you try to anticipate this already in the conversation to frame. Okay, well, we see A against B. And so you take away a lot of the anecdotal discussions already in the meeting.

• 38:24Speaker 02

  But it is an interesting question, right? As you evolve a company, because I think in this board, everybody is professional and allows each other to hear out everybody's opinion and voices. And that's, I think, also unique of this board. But over time, boards are mostly formed by investors and not maybe what's best for the long term benefit of the company. And very seldom. There are some companies that do it well, but have yearly evaluations of boards and what the contributions and how it really works. And everybody sits there as investors that want to keep their board seat rather than what's best for the company. So I think that's something that founders should, as they grow up, really look at. What's the best board that we have? And do we have a board that works from decision-making perspective?

• 39:05Harry Stebbings?

  Johan, outside of Trade Republic, what is the best board that you are on and why?

• 39:09Speaker 02

  I think Pleo is the one, because they do actually that. It's a very diverse board. We have independent board members, not only investor board members, and we evaluate each other every year on the competencies and what the lack of competencies that we have in board. It's very strategic at the same time operational.

• 39:26Harry Stebbings?

  When do you think is the right time for founders to establish a board?

• 39:30Speaker 02

  At the earliest stages, a board is just a meeting agenda. I mean, as you know, you're in pre-seed and seed, you don't really have a board. But in Trade Republic's situation, you needed a board from day one because we were a regulated company and make sure that we adhere to those regulations. But I think when you've raised 10 to 15 million or 20 million or passed your A round, I think you should have a formal board because it needs some governance around the company and making sure that you have the right decision-making qualities.

• 39:57Harry Stebbings?

  Christian, can I ask you, before we do a quick fire, when I spoke to some of your team, when I spoke to some other of your investors, this is not Johan, so Johan is excused from this, but if there was a weakness that they gave you, it was actually very similar. They said that you're brilliantly strong at being on top of everything and being able to go very deep into certain things, but you're also able then to use that as a weakness and kind of micromanage and jump on things. How do you think about that? And how do you determine what to delegate versus what to jump on top of? And Christian can own again.

• 40:29Speaker 00

  So first of all, we killed the word "micromanagement" in the company, right? It's not allowed anymore. We call it "hands-on", right? So you can do decisions on the fly. No, jokes aside, I guess, I mean, looking left and right, I think it's a curse of many, let's say, product-driven founders, that they want to be close to the product, closer to decision, and close to every detail, right? Because that's what you used to do in the seed and Series A phase, where you can decide every button's place, right? And then that might hold back certain teams, and obviously it's very hard to decide Which decision is really value adding and which maybe is just inefficient to do. And the more you groom your executive team, the more you get people, you want people who actively disagree with you and call that behavior out. And so, for example, my chief of staff, Julian, he now leads all growth, right? So we have a very intimate, very great relationship.

• 41:11Speaker 00

  And so he has no problem saying, well, I think I got it. Let's do it, right? And so you want to establish this, but obviously it's hard, but I need to have the final decision because eventually it's a direction I need to give to the company, right? And so therefore I'd love to stay close. But again, I would really say it's in a company culture, like if very independent from me, which I try to install really of hands on decision making. Like few meetings, everybody in the room and then just do a decision on the fly. I think that helps sometimes, but obviously something to work on for myself as you grow up as a CEO.

• 41:40Harry Stebbings?

  Tough question for you to finish before the quick fire, Johan. When we we mentioned kind of the reserves pricing earlier and kind of that that never being a question. There are sometimes misalignments between venture investors and founders. What do you think from your, you know, many years in venture now are the biggest misalignments between founders and VCs that we should just acknowledge more?

• 41:59Speaker 02

  Maybe first time founders that haven't made any money yet and they come to a situation where you have a B O C round that nice valuation and the paper gain of these founders are healthy and they haven't taken much off the table. That's a sensitive question for many investors that why do you want to sell now and what's the story, something we don't know, et cetera. But I think what what investors can really do is be proactive in this matter and making sure that there is an opportunity for founders at some point to get some exit and liquidity. And in order to be able to swing the whole way. And I think some investors think it's pretty difficult to understand, but I think as investors, we have a duty to do that.

• 42:35Harry Stebbings?

  Where does that cap out? Is that like five million?

• 42:38Speaker 02

  Maybe, yeah. Yeah, five million. It's about savings money, buying a house, paying off the mortgage, making sure they have, you know, more than that. And then, and then is it a hundred million? Probably not.

• 42:49Harry Stebbings?

  Listen, I would love to do a quick fire round then, chaps. So I say a short statement, you give me your immediate thoughts. Does that sound okay?

• 42:55Speaker 02

  Perfect.

• 42:56Harry Stebbings?

  Okay, so let's start with Christian. What was the most challenging moment in the Trade Republic journey? Hiring the first person.

• 43:02Speaker 00

  I remember like it was like Thomas and me and Marco, like three founders. And then it's so hard to find the first person, which is as crazy as you. So basically, you don't have any money, you don't have any funding, right? You just say, well, it's gonna work out. And then this guy was a backend developer. He had a wife and kid, and I think it took like six to nine months. I had like twice dinner with the entire family, right? So that was, I think, in hindsight, one of the hardest phases. Because when you have the first person, he's like an ambassador for you. And then the second, third hire gets much easier. But I remember like this time, I said, fuck, if we lose this guy now, right? We start again and I need to meet the family. So this is very hard.

• 43:35Harry Stebbings?

  Johan, what do you know now that you wish you'd known when you started in venture?

• 43:39Speaker 02

  All right, it's gonna be a boring one. It's that it's all about the founders. But you have to remember, I came from an operating background, big companies, and then into my own startup. And then I went to angel investing, which is pretty much hands on. And then I joined Benchmark and I thought, this is a great product, a huge market. There are so, so founders, but I'm gonna be able to fix this because I'm an operator. And that's totally wrong. And I didn't get that. It took me a number of years to really understand that it's all about the founders.

• 44:06Harry Stebbings?

  I think the biggest mistake I see operators turned investors make is that they are attracted most to the founders where they feel they can have the biggest impact.

• 44:14Speaker 02

  Exactly.

• 44:14Harry Stebbings?

  And that may not be the best investment. Christian, what have you changed your mind on in the last 12 months?

• 44:20Speaker 00

  Performance marketing. So I think we've been in this trap, a rabbit hole, right? I think 2020, 2021, we would spend hundreds of millions at Facebook and Google. And then came 2022, we just raised our round and we thought, okay, how can we focus on unit economics and just drive down cash consumption? And for one day on the other, we just basically stopped all things performance marketing. And we just killed it to zero. And we saw that almost we get as many customers as before. And I get that totally changed my mind, we had to spend money in growth. We don't spend much on Google, on Zayo, on Facebook. We do affiliate influencers, ambassadors, brand marketing, benefits for the consumers. But I think one of the biggest surprises I really had like 2023 is that all the money we spent on performance marketing might have been clever investment.

• 45:02Harry Stebbings?

  Can I ask, how do you think about influencer marketing? Sorry, I know we're in quickfire, but this is too interesting.

• 45:07Speaker 00

  So this is something we underestimated. We thought those chefs are incredibly expensive and why would you give them so much money? And now it's a bunch of ambassadors who re-drive your authenticity and are your biggest connection pieces to the audience, to the community, right? Especially for product like ours, that when you get it once in your hand and you use it, you tell your friends and family about it. So I guess this is one of the largest marketing channels we have by now.

• 45:28Harry Stebbings?

  Johann, everyone has an anti-portfolio. What's the biggest anti-portfolio for you? And what should you have seen that you didn't?

• 45:35Speaker 02

  As that question hurts. Konto is one, thinking it was too much overlap with Tide. We Fox was one, a German insurance play. But the one that I think is interesting and learning from is a couple of others. Matink, which we could invest at eight million in their seed round. This is now many moons ago. They were launching a personal finance app in the US from Sweden. And I said, this is not going to work. They're great founders, but I'm sure we can't buy into that idea. And they went over to the US, failed, went back, turned around the business, build a huge open banking platform business that they sold to Visa for a couple of billion. Lesson is, there was a real poor idea that I was asked to back.

• 46:17Speaker 02

  I didn't, but they learned from that, went back, pivoted severely and made it to brilliant success. And I should just have invested in the two great founders.

• 46:26Harry Stebbings?

  Those are just the worst, aren't they? When the idea changes completely and it's a completely different proposition. But then it's so hard when you have someone great doing something terrible. Christian, what would you change about the EU tech ecosystem? You know, we have Keith Raboy on your board. Keith famously laughs at me and says, you know, why are you in a museum, Harry?

• 46:46Speaker 00

  Yeah, there's a point to it, right? No, I think we're bearish in Europe, I need to admit. So I guess I think we love our investors and it's great to work with them, right? But the mere fact that basically when Republic may exit and pensioners in Florida get the money, right, that must kill you as a European. We must have people who can really make the big, big checks here. I think it's incredibly important so you can build this ecosystem.

• 47:06Harry Stebbings?

  You know, I think we do have the people here. They just don't want to take the risk because we have big pots of cash here.

• 47:12Speaker 00

  Yes, of course. I mean, I think there's a combination of the money and the people who are willing to commit that money to these things. But for example, take Germany, right? Where insurances are forbidden by law to invest in venture and all this stuff, right? So I think this is all prohibiting quite a lot. And I think we're thinking not big enough. To be very honest, if we really want to hire an engineer here in Berlin, who has seen large distributed IT systems for millions of customers, we don't find them here in Berlin. We need to go to the UK, we need to go to Sweden, to maybe Russia to hire these people, right? And that's a pity that we don't have the talent. So I guess there's much to do. I mean, we pride ourselves that Europe has grown a lot, but still relatively speaking, has lost a track with America and China. So much to do.

• 47:51Speaker 02

  I'm really bullish about Europe, though. I must say. You must.

• 47:55Harry Stebbings?

  Please make me feel better because I am not these days. So hit me, Johan.

• 47:59Speaker 02

  No, no, there's some late-stage capital that disappeared. But there's a lot of dry powder on the sidelines for early-stage investing.

• 48:05Harry Stebbings?

  But is there a generation of really, really great founders enough to supply that capital?

• 48:09Speaker 02

  Absolutely. And I think it's just about time. We're seeing all these new companies coming out. We're seeing new unicorns. They're coming from sixty-five cities. You know, ten years ago, they came from three cities. Coming all over Europe, much bigger market, remote working can put teams together that we couldn't see before. I think the one thing that we're missing is exit markets. Many of the companies go to the US market for IPOs, et cetera. I think that that's something that we need more. But I mean, hey, the US ecosystem is sixty years old. We are, you know, maybe at twenty. We just need some more time. The ingredients are there. I'm really bullish. I'm a bit drinking my own Kool-Aid, but I'm fine with that.

• 48:46Harry Stebbings?

  Johan, I'm in London. I love London. I want to stay in Europe. I want to buy into it. I'm just struggling. And so my question to you is, then, when you look at the regulatory environment, when you look at Figma, when you look at Giphy getting blocked, when you look at the troubles that happen for Activision, the CMA and European regulators are blocking the spigot of cash coming out in a way that's untenable.

• 49:10Speaker 02

  Yeah, it's rubbish, right? This is the thing, I've sort of changed my mind in the past twelve months. When AI came and all this discussion, I thought that we need more regulations. I think Apple's business practices may be a bit of a question. But in the end of the day, too much regulations is going to stifle innovation. And what we've seen here, where they just extrapolate and making up their own opinions with CMA and firms from Figma, may be competing in the future. I think it's totally wrong and it will stifle competition. That said, I do think that the big six or big five, or however you call them, have an ecosystem and platform business that's also stifling competition a little bit. So there has to be something around there, but too much is certainly not good for innovation.

• 49:49Harry Stebbings?

  People say that in Europe also we have maybe younger people who don't want to work as hard. They like life more, they work to live. And in Europe, it's just a very different culture and hunger for work. Do you think that's fair?

• 50:03Speaker 00

  Yes, no, I think yes. I mean, as Europeans, we enjoy things more. But take it like this, right? If you're entering a market with some moats, right? With stepping out of your comfort zone, you can already outcompete, right? And outperform. So it's a pro and a con.

• 50:15Harry Stebbings?

  Christian, how do you detect those mindsets when you're hiring? Those people who want to work hard?

• 50:20Speaker 00

  First of all, and I think that's really one of the biggest learnings, right? So I think if you grow up as a company, you go from, I don't know, like fifty to two hundred, three hundred employees. You have the first bunch of people who are really unhappy in your company. And as a founder, you take it personal. You think like, how can you be unhappy? I try to make everything so great. So you sit down with these people, you open your book, you write on everything. You try to make it better. And then you do all the fixes, then still people are very unhappy. And then I think we recognize that if you cannot hide it, embrace it. So by now, I think we own our culture, which is very performance driven. Which if you don't accelerate, if you don't push, you're out. We evaluate you quarterly. So we don't want to be this all everybody's happy place. We want to be a place where those people who want to achieve something are welcomed. And so how do we determine this? I mean, obviously, we have a rigorous recruiting process.

• 51:02Speaker 00

  But given the labour laws in Europe, we treat the probation period as an extensive form of interviews. So you're going to be evaluated all the time. At the end of your probation period, there's a committee to really, that you can stay. So there's somebody to step in and pitch it for you. Takes some time to implement and so for people to love that kind of culture. But I guess it increases talent density a lot. And then you create a bunch of people, two or three hundred people, who are really in it. Who really love what they're doing, who want to work more than forty hours a week. And then it's a lot of fun, actually.

• 51:29Harry Stebbings?

  Speaking to you, Christian, that reminds me of like, if Nick at Revolut and Keith were one mind, that would be the outcome in terms of the answer. I totally agree with you and I love that. Can I ask you, Johan, you work with some of the best founders also outside of Christian. Who's the best founder that you work with for hiring and why?

• 51:44Speaker 02

  I think I settle. I think Jacob de J, did a fabulous job in hiring. He always hired ahead of the curve. He thought about what's not the perfect match right now, but where is this person fitting into my company a year from now? Not being behind the curve. I think that's just one ingredient that he did, that I think was extraordinary. At an early stage of the company, thinking about that from the beginning. So I think that's one trait that I really admire.

• 52:09Harry Stebbings?

  I want to finish on a final question, which is to both of you. But it's if we paint the bull case, okay, for Trade Republic in 2034, so 10 years out, Christ. I remember when I used to play FIFA when I was a child, it was like FIFA 06. And now it's like 34, 24. But if we paint the bull case, what is Trade Republic in 2034? And so, Johan, why don't we go with you first and then we'll end with Christian?

• 52:32Speaker 02

  Can I go with five years?

• 52:33Harry Stebbings?

  Sure.

• 52:34Speaker 02

  No, it's crystal clear to me. Trade Republic is the complete financial partner to millions of Europeans. It has more than 10 million customers, 100 billion in assets and a billion or more in revenues. It's publicly traded and it's not only savings platform, but also the banking partner for these individuals.

• 52:51Speaker 00

  Yes, I mean, five, 10, 50 years, as you prefer, right? So we started with the pension gap, right, with Trade Republic? And now we have two or three people just employed to think about this. And little did I know back then how much of a problem it is. I'm here and I really say it, it's not founder bullshit. I think it's the largest problem of our society next to climate change. It's going to affect literally everybody's lives. And I think people are going to wake up and people are going to go in the streets when they recognize that their public pension is going to fall apart. Meaning in the next 10, 20 years, you're going to see millions of people depositing billions, when not trillions, into capital markets to invest and to build a pension for themselves. They're going to flee into that, right? And so Trade Republic is not the, but a solution to this trend. I think we're going to go with this wave. I think you can create a company similar to Charles Schwab in America, right?

• 53:34Speaker 00

  America introduced the 401K system, meaning the incentivized savings in the 70s and 80s. And I think by today, you rarely meet an American who doesn't have a Charles Schwab pension. Like almost everybody has a Charles Schwab pension. There's room for a Charles Schwab in Europe. There's nobody who's going for this other than Trade Republic. We have the licenses, the tech, the people and the money to go after that. With 4 million people who have made the first inning of this race. And so this is what we want to push, right? So I think in 10 years' time, you're going to see one generation of Europeans having a part of their pension with Trade Republic. And we're going to grow with them, going to grow the business with them. Hopefully it's more than 10 million people, hopefully it's more than 100 billion of assets. I think it's unambitious what we see, where that gets us.

• 54:13Harry Stebbings?

  I've loved doing this. This has been so much fun. Thank you for entertaining my completely off-script questions and you've been amazing.

• 54:19Speaker 02

  Thank you, Harry. It's great to see you.

• 54:20Speaker 00

  Thank you.

• 54:21Speaker 02

  As always.

• 54:23Harry Stebbings?

  I have to say, I just love doing these shows where we have the founder and the lead investor of that company. I think it brings such colour and nuance to the discussion. If you want to see more, you can obviously watch it on YouTube by searching for 20VC, that's 2-0-V-C. But before we leave you today, there's no shortage of helpful AI tools out there. But using them means switching back and forth between yet another digital tool. What was supposed to simplify your workflow just made it way more complicated. Unless, of course, you're in Notion. In Notion, you can automate the tedious tasks like summarising meeting notes or finding next steps, really freeing you up to do the deep work that we all want to do. And that's why Notion is used by over 50%, 50% of Fortune 500

• 55:06Harry Stebbings?

  companies. And teams that use Notion send less emails, cancel more meetings and reduce spending on tools. Try Notion for free when you go to notion.com/20vc. And speaking of amazing products like Notion there, I'd like to talk to you about a company called Digits. They're a full-service AI accounting company. And if you're in need of an accountant or looking to switch, there's no better solution than Digits. Starting at just $350 a month, which is less than half of what you'd pay a traditional firm, Digits is the most accurate, most efficient solution on the market. They've developed proprietary AI technology that automates tedious financial tasks and delivers reports for the actual close of the month, not two to three weeks later as always. And they also allow you

• 55:50Harry Stebbings?

  to keep track of key metrics like revenue, burn, cash flow and runway in an incredible live dashboard. The best part of all of it, this is vetted and signed off by their in-house CPAs. If you're interested, visit digits.com/20vc to claim your special offer today. That's digits.com/20vc. And finally, travel and expense are never associated with cost savings, but now you can reduce costs up to 30% and actually reward your employees. How? Well, Nirvan rewards your employees with personal travel credit every time they save their company money when booking business travel under company policy. Does that sound too good to be true? Well, Nirvan is so confident.

• 56:32Harry Stebbings?

  You'll move to their game changing all in one travel corporate card and expense super app that they'll give you $250 in personal travel credit just for taking a quick demo. Check them out now at navan.com/20vc. Now stay tuned, we have one of the best shows we've ever, ever done, coming on Monday with the one and only Roger Ehrenberg, the man famous for doing multiple 10x funds.