Munich Startup: Who are you and what does Sub Capitals do? Please introduce yourselves briefly!
Franz Liebermann, Sub Capitals: We are Marius Siegert, Marc Schmid, and Franz Liebermann, the founders of Sub Capitals. At Sub Capitals, we have been developing automated trading systems using machine learning since 2017. The goal is to ensure a fair long-term Product for private investors and thus achieve greater equality in financial markets and financial inclusion.
The first building blocks for this were laid by Marius Siegert. Seven years ago, he began to actively participate in the stock market with his own trading strategies. This enabled him to recognize the hurdles and difficulties associated with investing in the financial market very early on. He therefore set himself the goal of removing these hurdles for all of us and wanted to create the possibility of investing autonomously in the financial market using AI.
Marius' initial experiments and strategies, as well as the continuous optimization of his investment approach, remain the foundation of our product to this day. Marc Schmid was one of the first to embrace the vision behind Sub Capitals early on. He had already gained extensive experience in the first machine learning projects in industry. And through his master's degree in information technology and mechatronics at the Technical University of Munich, he was able to adapt his knowledge to the financial markets. As the venture became more concrete, the two of them sought early support from an acquaintance of mine, Franz Liebermann. I had already founded my own software company and was looking for a new challenge. Initially, I supported the other two in building the company and eventually joined the company fully.
Today the three of us are sitting side by side next to our other team members in our office in Lothstraße, in Strascheg Center for Entrepreneurship.
Sub Capitals aims to make AI more widely accessible in the financial industry
Munich Startup: What problem does your startup solve?
Sub Capitals: Groundbreaking results have been achieved with artificial intelligence in recent years, and the technology still has enormous potential. However, AI is still accessible to very few. Especially in the financial industry, it is usually only available to institutional investors. The reasons for this are varied: for example, a lack of know-how and resources, or a lack of time in the daily work routine of private investors. This creates a significant imbalance that disadvantages private investors.
Sub Capitals therefore sets the democratization of AI for private investors as its missionin order to counteract the imbalance in the financial markets and to make AI in the financial sector more accessible and fairer to the general public.
Munich Startup: But that's been around for a long time!
Sub Capitals: Yes, institutional investors such as banks and corporations have been using artificial intelligence in analytical processes and trading decisions for some time. However, we see very little development in this area in the private sector. There are initial approaches from 'robo-advisors' that are integrating machine learning-based algorithms into their investment decisions.
However, a purely AI-based system only exists through certificates or as a hedge fund. The option to manage one's own portfolio directly through an AI trading system is still in its early stages and therefore not yet established on the market.
What we are increasingly observing is that the first steps toward democratization in the financial markets are being driven forward by the era of neo-brokerage. Neo-brokers are a new generation of online brokers that significantly lower barriers to investing through easily accessible, affordable offerings. The best-known examples in German-speaking countries are Scalable Capital from Munich or Trade Republic, which also originally have their roots in Munich.
We at Sub Capitals see this as a great opportunity to make technology-based investing accessible to a wider audience in the future with a product based purely on artificial intelligence and our underlying Neo-Investing approach.
Through many failed attempts to a solid foundation
Munich Startup: What have been your three biggest challenges so far?
Sub Capitals: The first point to mention here is team building. Building a diversified portfolio is easier than bringing together different individuals into a developing team! Today, we are extremely proud of our still manageable team of six highly motivated entrepreneurs, and we are constantly growing.
The most difficult and time-consuming part was building our existing AI trading system. We developed the system through continuous iteration and numerous failed attempts based on scientific findings, and today it represents the solid foundation of our entire project.
The third point is the ongoing search for cooperation partners. We have opted for a business-to-business model to offer our services directly to customers through their existing portfolios. We have already been able to convince the first cooperating banks and brokers of our idea. However, we are looking for additional strategic partners with whom we can make our trading strategies, and thus AI, accessible to their customers.
Munich Startup: Where would you like to be in one year, where in five years?
Sub Capitals: Our algorithms have been working according to our vision for over a year now. Just a few weeks ago, we successfully launched our brand, and in six months we're aiming for our first round of financing. Looking ahead a year, we'll already be managing the first client funds with our AI. And in five years, our Neo-Investing service will have established itself as a new market segment in the private investor space.
Munich Startup: How do you rate Munich as a startup location?
Sub Capitals: Due to our strongly scientific approach and the resulting close relationship with educational institutions, our studies at the Technical University of Munich and the Munich University of Applied Sciences fundamentally shaped our approach. We therefore view Munich as a startup location and ecosystem as very promising for our project and can very well imagine further expanding our Europe-wide network from here.
Munich Startup: Risk or security?
Sub Capitals: Without much thought: Always safety! We're not fans of risk, which is why we outsource all trading decisions in the financial market to our AI. The AI can make the best, calculated decision in a completely rational way. Especially with our future customers in mind, we always prioritize safety over risk in order to establish a profitable service for everyone in the long term.
