European insurer Getsafe has acquired deineStudienfinanzierung, a nimble German digital platform for student loans featured on the local edition of “Shark Tank” in 2019.
This is Getsafe’s second acquisition in a few months, after it took over the German portfolio of troubled French insurance technology company Luko, growing its user base to more than 550,000 customers. But this time, the Heidelberg-based company is getting more than customers.
While the terms of the deal were not disclosed, TechCrunch has learned exclusively from Getsafe CEO Christian Wiens that deineStudienfinanzierung will continue to operate as a standalone business and that its entire team — “around 10 people” — will continue to work after the acquisition.
In practice, deineStudienfinanzierung will continue to help students apply online for publicly subsidized loans it offers partner, German state bank KfW. This has been the startup’s main focus since it moved away from facilitating grant applications. In total, it has helped around 200,000 students receive over €1 billion in study funding since its creation.
If this amounts to less than €5,000 per student, it’s because the demand for student loans in Germany is different than you might know, Wiens explained.
“Student loans are the second most popular form of external student financing in Germany after [grants]. Unlike the US, universities in Germany are largely tuition-free, meaning that student loans are generally used to cover living expenses. Therefore, the average student loan amount is much lower in Germany than in the US
COVID boosted demand for student loans because many students were unable to perform their side jobs due to the lockdowns (eg working in bars and restaurants). Many lost their main source of income overnight and were forced to turn to alternative ways to meet their living expenses. Since then, the volume of funding has returned to previous levels.”
Just like Getsafe didn’t invent insurance, deineStudienfinanzierung didn’t invent student loans. Instead, both bring a digital approach that aims to connect more organically with young people.
Overlapping goals
Despite plans to keep things separate, Getsafe is very hopeful that there will be synergies between the two businesses that go beyond their shared vision. “With deineStudienfinanzierung, we are now a relevant fintech player for students,” said Wiens.
For Getsafe, this is an opportunity to get to know their prospective customers before they even consider talking to a broker. On average, it takes about two years for students who receive a deineStudienfinanzierung loan to secure their first job — and Getsafe is here for that.
In a country where Contents or Renters insurance is not a mandatory product, entering the job market is a more common trigger for insurance than renting an apartment, Wiens said. “We realized that in order to be their insurer of choice, we had to think one step ahead.”
Getsafe’s CEO believes that deineStudienfinanzierung users may be even more sensitive to financial risk than the average first-time jobber. “When you take out a loan and start paying it off after starting your first job, you’re more aware of the fact that you’re relying on your income. So that becomes a natural trigger to look at, for example, income protection insurance.” (This is one of the policies Getsafe offers, along with content and personal liability insurance.)
When asked if insurance was better suited for deineStudienfinanzierung to leverage its user base than banking, its founder Bastian Krautwald answered in the affirmative.
“The thing about banking is that most customers already have a bank account from an early age. By the time customers apply for a student loan, the barriers to change are quite high. However, with insurance, it is different. It’s not uncommon for young people to get into insurance for the first time in their twenties,” Krautwald told TechCrunch.
This was a loaded question: Krautwald also co-founded Wajve, later known as OWWN, a banking product aimed at the customers and target audience of deineStudienfinanzierung. But the fintech offering never made it out of the trial phasewith OWWN partnering with neobank N26 to secure a special discount for beta users and those on its waiting list.
What’s next
OWWN, Wajve and deineStudienfinanzierung did not have just one CEO. shared a parent company, FiRec GmbH, which raised €5 million in funding from investors including EQT Ventures, 468 Chapter and final jump, as well as German business angels. Getsafe has now acquired FiRec in its entirety, while Krautwald will remain in his role as CEO of deineStudienfinanzierung.
“We expect deineStudienfinanzierung to grow steadily and profitably as a stand-alone business this year,” said Wiens. “However, short-term revenue goals are not our primary focus, as this acquisition is primarily of strategic value to us in better understanding and reaching our target customers when they graduate.”
Will there be more strategic acquisitions in Getsafe’s near future? “We are not currently actively seeking targets, but with two acquisitions under our belt, we are ready to explore and quickly pursue opportunities when they arise,” said Wiens.
We won’t hold our breath on that, but we’ll be keeping a closer eye on another hint that Getsafe gave in its press release: that it wants to “further expand to serve even more European markets” than the four countries where it already operates.
