The Fioneer spin-off is intended to better serve the needs of customers in the financial sector.
(Photo: Reuters)
Dusseldorf When SAP spun off the business with products for financial service providers from the group of companies, the management hoped for more independence and dynamism. CFO Luka Mucic spoke of a “speedboat” that the tanker wanted to launch.
However, the new company Fioneer needed some time to get going: the separation from SAP was complex and a new organization had to be set up. Now, around eight months after the official start in September 2021, the management around Dirk Kruse can present the first major customers.
For example, the Luxembourg start-up Como Digital Life uses the Cloud for Banking application, which offers core banking functions such as payment processing. And one of the largest Canadian banks has opted for a product package from SAP and Fioneer, reported Mucic when presenting the quarterly figures.
The business is developing “well above the expectations of investors,” said Fioneer boss Dirk Kruse in an interview with the Handelsblatt. The company does not publish current business figures and forecasts. According to internal information available to the Handelsblatt, it had around 270 customers in the fall.
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These reports are important for Fioneer: It is a signal to the market in which several competitors are active with Temenos, Mambu and Avaloq. And it is the first proof that the separation from SAP could fulfill its purpose: namely to give momentum to a business that was considered neglected in the group.
“Well over 1000 employees” by the end of the year
In April 2021, SAP announced that it would enter into a strategic partnership with the investment company Dediq to further develop products for banks and insurance companies outside of the group structures. The Munich investor agreed to invest more than 500 million euros. In return, he took over 80 percent of the new company.
Acquisitions also help in recruitment.
Spicy: The charitable foundation of co-founder, major shareholder and chairman of the supervisory board Hasso Plattner (HPF) participated as an investor. After being criticized for possible conflicts of interest, the organization announced that it would sell the stake to another investor. HPF holds around 37 percent of the joint venture, but has no voting rights.
The management emphasizes that this does not affect Fioneer’s work. This is how the organization is set up: Fioneer has more than 800 employees, and by the end of the year it should be well over 1000, says Kruse. Takeovers also help with recruiting – the company recently announced that it would buy the 40-person consulting firm Okadis Consulting.
In the course of the expansion, the regional coverage is also growing: So far, Fioneer is active in twelve countries, Europe as well as North and Latin America are already well covered, says Kruse. Offices in the United Arab Emirates and South Africa are to open shortly.
Fioneer develops industry-specific solutions, Kruse sees four main areas:
- General finance applications – for example, when the new regulatory standard for insurance, IFRS 17, comes into force at the turn of the year, more than 100 customers will use a Fioneer product for it.
- Core banking systems from the cloud – Neobank Como uses such a solution for payment processing, for example.
- Special applications for finance – such as an end-to-end digital credit work station or a sustainability solution for the credit business.
- The embedding of financial services in classic business processes – an example of “embedded finance” is credit default insurance for suppliers, which is offered directly via a procurement platform.
The connection to SAP as a selling point
The separation from SAP takes place during ongoing operations. “We knew that the spin-off would be complex, despite the 18-month lead time,” says Fioneer boss Kruse. Good progress has been made in areas such as consulting, but software development still needs a few months. After all, contracts, products, copyrights and program codes have to be divided up – and that in a regulated industry. The process should be completed in the course of the year.
>> Read here: “If the customers win, we win too” – How the head salesman is turning SAP sales inside out
The connection to SAP is an important sales argument: Fioneer uses technologies and data models from the Dax group in product development to ensure compatibility. The two companies also work together in sales. “SAP helps us with their level of awareness,” says Fioneer boss Kruse.
Fioneer does not publish business figures. The sales prospectus of the major bank UBS, which is looking for new investors on behalf of the Hasso Plattner Foundation, offers a clue: According to this, the company posted sales of 154 million euros last year and is working “on the breakeven point”.
More: “If the customers win, we win too” – How the head salesman is turning SAP sales inside out.