Munich Startup: Who are you and what does Divizend do? Please introduce yourselves briefly!
Dividend: Our B2C software helps private investors reclaim their taxesby automating the withholding tax refund process. Divizend is the first fintech in the world to digitize such a novel service in a particularly user-friendly and affordable way. With our holistic approach, verbalized by our claim "Find, Trade, Maximize," Divizend's platform will become the central location for investors seeking high dividend yields, as they will always find the most relevant research, analysis, and tax services there.
Unicorn founder and “Game of Thrones” algorithm
Thomas Rappold, CEO and co-founder of Divizend, has worked for Allianz and Credit Suisse, has more than 20 years of experience in fintech, and is co-founder of the fintech unicorn Numbrs. He has in-depth knowledge of wealthtech and open banking APIs such as PSD2. He is also the author of tech investment bestsellers such as "Silicon Valley Investing" and frequently appears in print, online, and on TV for renowned financial magazines as a technology investment expert.
Julian Nalenz, B.Sc. in Computer Science from the Technical University of Munich, Divizend CTO and co-founder, has been very active for years, particularly in the Munich startup scene (ObjectBox, CQSE). In 2019, he was the lead developer of the underlying machine learning algorithms for a university seminar that explored the question of how long "Game of Thrones" characters will live, and whose final results were reported in numerous international newspapers and other media outlets.
The founding team came together in mid-2019 through university and software development projects in the fintech sector, as well as within the Munich meetup scene.
Munich Startup: What problem does your startup solve?
Dividend: Dividends on foreign shares are taxed twice: first with the foreign withholding tax and then with the domestic income tax. Currently, refund opportunities are largely missed due to formal complexity, technical challenges, and a lack of standardization. The European Union has been striving for a uniform regulation for decades, but so far, no standardized process has been established.
Divizend is now the world’s first Wealthtax Fintech, which offers a digital platform for the automated reclaim of foreign withholding taxes on dividends for private investors, thereby solving a real, long-standing customer problem. Currently, this represents an annual market volume of $90 billion in withholding taxes paid on cross-border securities, of which $18 billion remains unreclaimed.
Divizend solves problems for banks and tax software
Munich Startup: But that's been around for a long time!
Dividend: Banks in general are under considerable pressure, both from a regulatory and cost perspective. Under these circumstances, it would not be profitable for a single bank to develop a proprietary refund solution. This is another reason why many banks are interested in collaborating with Divizend. Tax software companies face similar problems, and a solution like Divizend's would be too specific for them to develop on their own. Other startups lack the necessary expertise, as implementing such a solution requires in-depth technical knowledge, as well as domain-specific knowledge of tax topics and securities.
As a deep-tech startup, we have developed the entire system of our unique key technical components ourselves, also to ensure that we always deliver only the highest quality products to our customers. We are currently developing the following modules:
- The first digital B2C platform for reclaiming foreign withholding tax on dividends
- The first international securities aggregation API to generalize banks' securities APIs
- The first international, graph-based securities database
- The first interactive dividend screener
Munich Startup: Has there ever been a point where you almost failed?
Dividend: Quite the opposite: Divizend has already received overwhelmingly positive feedback from public investors, as well as strategic and well-known figures in the financial world and the media. Furthermore, our successes in competitions and incubators such as the European Data Incubator, the EY Start-up Academy, the REACH Incubator, and the Munich Business Plan Competition demonstrate that we are pursuing an outstanding business idea and consistently implementing it.
“Our big goal is the IPO”
Munich Startup: Where would you like to be in one year, where in five years?
Dividend: We aim to close a Series A round of €2 million to €5 million by the end of 2021. Based on our existing partnerships, we now expect revenue of €1.5 million in 2021, €3 million in 2022, and finally €40 million in 2025. This puts us in a position to achieve our ultimate goal: an IPO. We will also be entering into many more partnerships with leading banks, stock exchanges, financial portals, and national tax authorities in the coming months and years. Regarding our international expansion, we will launch our services in Europe in 2021, North America in 2022/23, and Asia and Australia in 2024/25.
Munich Startup: How do you rate Munich as a startup location?
Dividend: We consider the Munich startup scene to be one of the most exciting ecosystems in Europe, particularly due to its dense network of universities, investors, meetups, other startups, and technology companies. We are already successfully collaborating with chairs at TUM and LMU at the R&D level. Finally, we see continued and ever-growing potential for Divizend here, including in future key technologies and initiatives such as artificial intelligence and the "Munich Quantum Valley."
Munich Startup: Risk or security?
Dividend: Former FC Bayern coach Otto Rehhagel coined the term "controlled offense" and was extremely successful with it. We live by this motto as a startup and are convinced that the combination of risk and security will lead us to long-term, sustainable success.
