Munich Startup: What does your startup do? What problem do you solve?
Alexander Rennig, Cometum: Cometum is a neo-private bank that enables investments in alternative asset classes such as art, vintage cars, diamonds, and private equity. Our product offering is primarily aimed at young, wealthy individuals, the so-called high-net-worth millennials and affluents. We see ourselves as a "neo" private bank, as we are, on the one hand, a "wealth solution" that offers alternative investment opportunities for large assets. On the other hand, we also want to offer customers state-of-the-art banking services to meet the lifestyle needs of young, wealthy digital natives. To this end, Cometum will also offer a functional bank account with an integrated private banking premium credit card in the future.
We solve several problems. A distinction must be made between problems of private banks and problems of private bank customers.
Established private banks are currently facing major challenges. On the one hand, their clientele is aging, and one could argue that many private banks have aged along with their customers. On the other hand, private banks' offerings have neither evolved over the past decades nor adapted to the needs of a successor or heir generation. Furthermore, little emphasis has been placed on product innovations or technological advancements.
Problems of private banks and their customers
Private banks' clients are feeling this. In recent years, they themselves have repeatedly faced greater challenges in investing their assets. Especially in times of crises that repeatedly surpass themselves, such as the coronavirus pandemic, inflation, or war, not only the capital markets have repeatedly come under pressure. The willingness to switch among private bank clients is therefore correspondingly high. One in two private bank clients would like to switch or is looking for an alternative to their private bank. Above all, many private banks are failing to meet the high investment pressure and demand for alternative investment products. While they have wealthy clients, these problems mean they can no longer retain them in the long term.
In addition, there is a change that could accelerate this demographic development, the so-called “Great Transfer of Wealth”, the largest transfer of wealth in history, from the baby boomer generation to the millennial generation. As a private bank, it will then be difficult to conceal the aforementioned deficits and failures of recent years from this millennial generation. As digital natives, the beneficiaries of the “Great Transfer of Wealth” expect a hybrid wealth management solution from their private bank in the 21st century that also fully considers their digital assets. Stocks, fund investments, and especially fractional investments in tangible assets such as art, diamonds, or vintage cars, in tokenized form, will play a prominent role here. Young wealthy individuals expect a best-in-class user experience. Everything on-demand, but with the personal service component of a private bank. This is therefore more a need than a problem for a modern private banking client.
Cometum has made it its mission to meet this need as Europe’s first purely digital private bank.
“For Cometum, the careful selection of assets is a top priority”
Munich Startup: But that's been around for a long time!
Alexander Rennig: There are some crowdfunding providers that offer specific alternative assets, such as vehicles or art. However, these players rely on payment service providers (PSPs) to accept funds. This means that the customer transfers money or provides their credit card number for each investment. These transactions tend to be smaller. This usually results in the offered assets being somewhat cheaper and more likely to be classified as "collectibles."
For Cometum, the careful selection of assets is our top priority. We focus on "blue-chip assets," which will cost over €500,000 in regular operation. Starting at this scale, we can fully leverage the advantages of fractionalization/lot size transformation and create real added value for our clients. We thus open asset classes previously reserved for institutional investors, starting with a minimum subscription amount of €1,000 per investment. In keeping with this strategy, Cometum has chosen a private banking approach for its clients. This means you open an account once and invest in various assets through this account. Cometum takes care of everything else, including tax reporting and the withholding of capital gains tax on profits. Apart from that, we attach great importance to cost transparency. With us, all costs are explicitly disclosed and added to the subscription amount, rather than "hiding" them in the token price.
Entrepreneurial spirit meets financial expertise
Munich Startup: What is your founding story?
Alexander Rennig: I personally have a background in investment management and was responsible for fintech and insurtech investments at a few funds. Since I come from a family of entrepreneurs and have had the entrepreneurial mindset in my veins for four generations, it was clear to me for a long time that I would start my own company. In 2018, I founded my first company in the medtech sector, patented a product, and then quickly licensed it to a corporation. Since I was out of the operational side of the business, I looked for new opportunities and wanted to return to the fintech sector.
Fortunately, I then met my co-founder, Sascha Miller, who, as a lawyer specializing in banking and capital markets law, perfectly complements my skills and also shares my passion for finance and classic cars. Before becoming co-founder and CEO of Cometum, Sascha worked in the banking and finance team of a renowned law firm in Munich. He specializes in corporate, banking, and capital markets law. As part of his work, he advised private equity funds on leveraged buyouts and acquisition financing, as well as companies, banks, and financial institutions on corporate financing. During his time as a lawyer, Sascha became interested in blockchain and its potential applications in the securities and banking sectors early on. He saw the greatest potential of blockchain in the possibility of structuring assets as digital securities through tokenization.
In 2020, we founded Cometum together with Alexander Schätz, who is responsible for technical development. Before becoming CTO at Cometum, Alexander Schätz worked as a software developer at the Munich-based robo-advisor Scalable Capital and has gained experience at various established private banks.
“Currently, the focus is on professionalizing and commercializing the business.”
Munich Startup: What have been your biggest challenges so far?
Alexander Rennig: That's a really difficult answer. As a founder, you're constantly faced with challenges because you're doing a lot of things for the first time. Therefore, it's extremely difficult to estimate how long things will take to complete. This often inevitably leads to missed deadlines, and investors or other stakeholders increase the pressure. It was extremely challenging to properly document the regulatory requirements, including all edge cases, to design them as part of product management, and then have them developed. Fortunately, after a lot of testing and learning, we were able to resolve the issue.
Our current focus is on professionalizing and commercializing the business. In this context, we are implementing numerous business intelligence and marketing automation processes, further developing our investor management, and, of course, accelerating asset sourcing to increase the frequency with which new assets are offered.
Munich Startup: Where would you like to be in one year, where in five years?
Alexander Rennig: We plan to have significantly expanded the variety of assets we offer within a year. This means we'll be offering classic cars and supercars, art, diamonds, and private equity. Furthermore, our next design release will be live by then, and the mobile app will be available in the app store. These are things that should primarily benefit our customers by providing an improved user experience. Furthermore, in a year's time, we'll launch the secondary market, which will enable trading in alternative assets.
Cometum becomes a one-stop-shop solution for managing and building wealth
In five years, we will have expanded significantly and will be actively promoting our services in the EU. We plan to offer a credit card and traditional asset classes to complement our private banking offering, so that our clients will find a one-stop-shop solution for managing and building their wealth with Cometum.
Munich Startup: How have you experienced Munich as a startup location so far?
Alexander Rennig: Munich offers us everything we need. It's definitely close to investors, startup events, and various players in the financial services sector, such as tax advisors, lawyers, etc. We also receive a sufficient number of applications and therefore have no problems filling vacancies promptly. So, we're not currently experiencing a shortage of skilled workers. However, this is likely also due to the attractiveness of our business model. Furthermore, Munich offers an excellent work-life balance, which benefits our employees and makes relocation easier.
Munich Startup: Risk or security?
Alexander Rennig: I believe that as a founder, you have to have a certain affinity for risk, otherwise it's difficult to deal with the constant ups and downs. This is especially true in the early stages of a company's founding. Nevertheless, risks must always be calculable for the sake of long-term business management, especially when you bear responsibility for customers, employees, and investor funds. As your success increases, the stake you or others can lose increases, and you automatically become a bit more cautious.
