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, classic cars, diamonds, and private equity. Our product offering is primarily aimed at young affluent individuals, the so-called high-net-worth millennials & affluents. We see ourselves as a “neo”-private bank because, on the one hand, we are a “wealth solution” that offers alternative investment options for large fortunes. On the other hand, we want to provide customers with the most modern banking services to meet the lifestyle needs of young wealthy digital natives. To this end, Cometum will soon also offer a functional bank account with an integrated private banking premium credit card.
We solve several problems here. A distinction needs to be made between the problems of private banks and the problems of private bank customers.
Established private banks currently face major challenges. For one thing, their clientele is aging, and one could say that many private banks have aged with their customers. Furthermore, the offerings of private banks have neither evolved over the past decades nor have they oriented themselves to the needs of a successor or heir generation. Moreover, little emphasis has been placed on product innovations or technological progress.
Problems of private banks and their customers
Private bank customers feel this. They themselves have been facing increasing challenges in wealth management in recent years. Especially in times of crises that continually top themselves, like corona, inflation, or war, capital markets have come under pressure again and again. The willingness to switch among private bank customers is correspondingly high. Every other private bank customer wants to switch or is looking for an alternative to their private bank. Many private banks are not meeting the high investment pressure and demand for alternative investment products. While they have wealthy customers, they can no longer retain them in the long term due to these problems.
In addition, there is a change that could accelerate this demographic development even further, 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 particularly difficult to obscure the above-mentioned deficits and failures of recent years to this millennial generation. As digital natives, the beneficiaries of the “great transfer of wealth” will expect their private bank to provide a hybrid wealth management solution in the 21st century that fully accounts for their digital assets. Stocks, fund shares, but especially fractionalized interests in tangible assets such as art, diamonds, or classic cars in tokenized form, will play a prominent role. Young affluent individuals expect best-in-class user experience. Everything on demand, but with the personal service component of a private bank. This is more of a need than a problem for a modern private banking customer.
Cometum has made it its mission to meet this need as Europe’s first purely digital private bank.
“For Cometum, careful asset selection is a top priority”
Munich Startup: But that’s been around for ages!
Alexander Rennig: There are some crowdinvesting providers that offer certain alternative assets like vehicles or art. However, these players rely on payment service providers (PSPs) to accept funds. This means that the customer transfers money for each investment or provides their credit card number. As a rule, these are smaller transaction amounts. This usually results in the assets offered being somewhat less expensive and are more likely to be classified as “collectibles.”
For Cometum, careful asset selection is a top priority. We focus on “blue-chip assets,” which will typically cost over 500,000 euros. At this level of magnitude, we can best leverage the advantages of fractionalization / lot size transformation and create real added value for customers. We thus open up asset classes to our customers that were previously reserved for institutional investors, starting with a minimum investment amount of 1,000 euros per investment. In line with this strategy, Cometum has chosen a private banking approach for its customers. This means you open an account once and invest in various assets through that account. Cometum takes care of everything else, including tax reporting and withholding capital gains tax on profits. Besides that, we place great emphasis on cost transparency. All costs are explicitly shown and added to the subscription amount rather than “hidden” 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 a few funds for fintech and insurtech investments. Since I come from an entrepreneurial family and have had the entrepreneurial mindset in my blood for 4 generations, so to speak, I was very clear for a long time that I would eventually found a company myself. In 2018, I founded my first company in the medtech sector, patented a product, and then licensed it very quickly to a major corporation. Since I was then out of the operations business, I looked for new opportunities and wanted to get back into the fintech sector.
Fortunately, I then met my co-founder Sascha Miller, who complements me perfectly as a lawyer specializing in banking and capital markets law and who also shares my passion for finance and classic cars. Before his time as co-founder and CEO at Cometum, Sascha worked in the banking and finance team of a renowned major law firm in Munich. He specializes in corporate law, banking law, and capital markets law. In 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 early on in blockchain and its potential applications in the securities and banking sectors. He saw the greatest potential of blockchain in the ability to structure assets as digital securities through tokenization.
In 2020, we founded Cometum together with Alexander Schätz, who is responsible for technical development. Before working as CTO at Cometum, Alexander Schätz worked as a software developer at Munich-based robo-advisor Scalable Capital and has gained experience at various established private banks.
“Currently, the focus is on professionalization and commercialization of the business”
Munich Startup: What have been your biggest challenges so far?
Alexander Rennig: That’s really difficult to answer. As a founder, you are continuously confronted with challenges because you are doing many things for the first time. That’s why it’s extremely difficult to estimate how long things will take to complete. This often inevitably leads to missing deadlines and investors or other stakeholders increasing pressure. It was extremely challenging to document the regulatory requirements cleanly, including all edge cases, to conceptualize them in the course of product management, and then to have them developed. After many tests and learnings, we were fortunately able to solve the issue.
Currently, the focus is on professionalization and commercialization of the business. In this context, we are implementing many 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 do you want to be in one year, where in five years?
Alexander Rennig: We plan to have greatly expanded the variety of assets we offer within one year. This means there will be classic cars and supercars, art, diamonds, and private equity at our company. Additionally, our next design release will be live by then and the mobile app will be available in the app store. These are things that our customers should primarily benefit from in terms of better user experience. Furthermore, there will be a secondary market in one year, which will enable trading of alternative assets.
Cometum becomes a one-stop-shop solution for wealth management and building
In 5 years, we will have expanded significantly and will actively promote our services in the EU. There will be a credit card and traditional asset classes to round out the private banking concept, so our customers will find with Cometum a one-stop-shop solution for the management and building of their wealth.
Munich Startup: How have you experienced the startup location Munich so far?
Alexander Rennig: Munich offers us everything we need. Proximity to investors, startup events, and various actors in the financial services environment such as tax consultants, lawyers, etc., is definitely available. We also receive sufficient applications and therefore have no problems filling vacancies promptly. We are not currently experiencing a shortage of skilled workers. However, this is probably 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 need to have a certain affinity for risk, otherwise you can’t cope well with the constant ups and downs. This is especially true in the early startup phase. Nevertheless, risks must always be calculable in terms of long-term business management. Especially when you bear responsibility for customers, employees, and investor money. With increasing success, the “stakes” that you or others can lose increase, and you automatically become a bit more cautious.
