A professional soccer player, an actuary, a consulting manager. Max Palko could have become all of these, but – luckily for the Rockaway team – life led him elsewhere and finally led him to the position of investment…
From the beginning, we’ve been selecting promising projects for the Rockaway Ventures portfolio – as evidenced by the fact that a few days ago Czech FinTech startup BudgetBakers received an investment of almost CZK 160 million. In my view this is excellent news, and so I’ve decided to share a few details from the background of the entire story.
Officially, the relationship between Rockaway and BudgetBakers goes back to 2017, when we made the first investment. But its roots go much deeper – because our portfolio also includes the StartupYard incubator, whose projects we monitor and with which we lead an active dialogue. And that’s precisely where we first encountered Jan Müller and his new startup – BudgetBakers.
Jan earned his spurs at Seznam, where he built the very successful Sklik system, so from the start it was clear that this start-up would be top-notch from a technical perspective. The strength of his vision didn’t manifest itself completely until when he convinced Michal Kratochvíl – one of the shareholders of StartupYard and at the time Managing Director at Accenture – to abandon his prominent corporate career and jump ship to BudgetBakers as CEO. At that moment it was clear to me that a great team had been created, one that would have a strong strategy and execution, would monitor trends, and would move forward quickly, both in the Czech Republic and globally.
When I look back at everything that has taken place during those few years since our investment, BudgetBakers definitely hasn’t disappointed me – from the very beginning they set a global course, and have succeeded. They quickly got their applications into Google Play and the App Store. They designed their Wallet application as freemium, meaning the app itself is free and only some functions are subject to a fee, plus they do local marketing and cross-selling on each market. They devoted a great amount of effort to regulatory issues and especially the European PSD2 Directive, and were one of the first FinTech companies in all of Europe to apply for a licence that with a client’s approval gives them access to all of their accounts and process their data to provide better services – so that they for example see exactly how much they spend on what. The licensing process took over a year, and today BudgetBakers is one of the few companies in the EU that has had their licence passported in all Member States of the EU and can also provide it to other parties in the form of Licensing as a Service (LaaS). That’s also one of the reasons for the new investment. Thirdly, it’s worth mentioning they’ve succeeded in launching the new Board app, a solution for small businesses and micro-businesses that allows them to manage their cash flow and finances as such. In short, they’ve done a lot and the new investment merely underscores the fact that they’re headed in the right direction.
I’m glad that the Rockaway Ventures team was able to help them on this journey – be it lots of advice and ongoing consultation, or additional funding. For us it was was a valuable experience, as it reminded us of the importance of pivoting and trying new things, because every business model evolves over time and changes, things get tested and are adapted.
What’s next? BudgetBakers has a new strategic partner and new investors: SnipTech and its founders Jasper Anderluh and Niels Klok. Jasper and Niels have extensive experience from their previous large project, European on-line broker DEGIRO. They know that downloading an application is simple, but that “stickiness” is key, as well as an element of customer support and other (at first glance) minor details that extend the necessary base. The vision is therefore clear – to implement local product call centres, boost development, sales, and customer support, and to add more language permutations to bring a product in English to users and providers of other services in local language versions. DEGIRO built their business on this, and in 2019 they succeeded in making an exit valued at EUR 250 million, so their plan is quite convincing to me.
I’m curious to see what they’ll create together. Aside from all that I’ve mentioned, intensive brainstorming is now going on in the area of more products – SnipTech may be in the Netherlands and the Baltic countries have their own developers, but their collaboration with BudgetBakers is quite certain to be close. I don’t have a crystal ball, and so don’t know what the future holds for BudgetBakers; that’s something we’ll find out over the next few years. Right now, it’s clear that their products remain independent – they’ll just have significantly greater revenues, plus they will use their European licence to provide additional services on a large scale. The result should be a truly pan-European FinTech platform of the future. We’ll see. They’re off to a nice start.