The spin-off Fioneer is intended to better serve the needs of customers from the financial industry.
Düsseldorf When SAP spun off the business with products for financial service providers from the Group, the management hoped for more independence and dynamism. Chief Financial Officer Luka Mucic spoke of a “speedboat” that the tanker wanted to launch.
However, the new company Fioneer took some time to get going: the separation from SAP was time-consuming, and a new organization had to be set up. Now, around eight months after the official launch 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, Mucic reported when presenting the quarterly figures.
The business is developing “significantly above the expectations of investors,” said Fioneer CEO Dirk Kruse in an interview with Handelsblatt. The company does not publish current business figures and forecasts. According to internal information available to Handelsblatt, it had around 270 customers in autumn.
For Fioneer, these messages are important: 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 serve its purpose: to get a business that was considered neglected in the Group going.
“Well over 1000 employees” by the end of the year
In April 2021, SAP announced that it had entered into a strategic partnership with the investment company Dediq to further develop products for banks and insurance companies outside the Group structures. The Munich-based investor agreed to invest more than 500 million euros. In return, he took over 80 percent of the new company.
Piquant: The non-profit foundation of co-founder, major shareholder and Chairman of the Supervisory Board Hasso Plattner (HPF) participated as a capital investor. After criticism due to 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 work of Fioneer does not touch this, the management emphasizes. 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. Acquisitions also help in recruiting staff – the company recently announced, for example, that it would buy the consulting firm Okadis Consulting with 40 employees.
In the course of the expansion, the regional coverage is also growing: Fioneer is currently 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 expected to open soon.
Fioneer develops industry-specific solutions, Kruse sees four priorities:
- General financial applications – for example, if the new regulatory standard IFRS 17 for insurance companies comes into force at the turn of the year, more than 100 customers will use a Fioneer product for this purpose.
- Core banking systems from the cloud – Neobank Como uses such a solution, for example, for payment processing.
- Special applications for finance – for example, a consistently digital credit workplace or a sustainability solution for the credit business.
- The embedding of financial services in classic business processes – an example of “embedded finance” is a credit default insurance for suppliers, which is offered directly via a procurement platform.
The connection to SAP as a sales argument
The separation of SAP takes place during ongoing operation. “We knew that the spin-off would be complex, despite the 18-month lead time,” says Fioneer CEO Kruse. In areas such as the consulting business, good progress has been made, and software development still takes a few months. After all, it is necessary to divide contracts, products, copyrights and program codes – and this in a regulated industry. The process is expected to be completed in the course of the year.
The connection to SAP is an important selling point: 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 CEO Kruse.
Fioneer does not publish business figures. A clue can be found in the sales prospectus of the major bank UBS, which is looking for new investors on behalf of the Hasso Plattner Foundation: according to this, the company recorded sales of 154 million euros last year and is working “at breakeven”.