How does a young start-up with just an idea and without having earned a single cent get to one of the most experienced bankers in the country as an investor? “He just called me,” says Andreas Treichl, long-time CEO of Erste Group and since 2019 Chairman of the Supervisory Board of Erste Foundation, Erste Group’s main shareholder. We’re talking regarding David Mayer-Heinischco-founder and CEO of the Viennese start-up Froots with currently twelve employees.
Froots (froots.io) – the name derives from “financial roots” – has set itself the goal of convincing the young generation in particular of long-term capital accumulation. A topic that has always been extremely important to Treichl – so important that following a few discussions with Mayer-Heinisch and his Co-Founder Dirk van Wassenaer held a ten percent stake in Lifetree Asset Management GmbH, which operates Froots.
The two founders met each other while doing an MBA in Madrid, which is where they developed the idea for Froots. “I saw in my previous job that the methodology of quantitative stock analysis can be designed so efficiently that you can give everyone a chance to invest sensibly in the future,” says Mayer-Heinisch, 36, who graduated following his studies at WU in Vienna, first worked at RBI and then at a German fund boutique as a fund manager. “We want to build a solid, long-term company that helps customers build a long-term financial cushion for the future.” That’s why they started looking for long-term partners early on – instead of short-term VC funds – like Andreas Treichl, Georg Kapsch, CEO Kapsch Group, or Adam Lessing, member of the board of LGT Bank Austria. “Froots gives everyone smart access to the capital market, private banking for everyone, so to speak,” says van Wassenaer, summarizing the concept.
Private Banking ab 150 Euro
Starting from monthly amounts of 150 euros or an initial deposit of 3,000 euros iyou are there. A specially developed algorithm invests the capital in ETFs, stocks, bonds and gold, depending on the desired term and the preferred risk. The portfolio management team also makes individual adjustments every two weeks if necessary. The closer an investor comes to his financial goal, the more likely it is to switch to lower-risk investments. The costs for the investor are initially one percent of the invested assets – and that’s all covered. This is deliberately very cheap in a market comparison in order to make the entry hurdle as easy and low as possible.
We want to build a solid, long-term company that helps customers build a long-term financial cushion for the future
The average investment horizon of the first few hundred customers since the start last October is currently 18 years. “Our customers have understood that the comprehensive insurance company is over,” says Mayer-Heinisch happily. Most investors are between 30 and 45 years old and invest from 200 euros per month up to 100,000 euros as a one-off investment. Overall, Froots already manages “a few hundred million euros, and our marketing is just getting started”.
Sparring partner Andreas Treichl
However, Treichl is not part of the future marketing strategy, it is said. “I’m an investor, a sparring partner and not a marketing vehicle for Froots,” emphasizes the latter. “His advice is incredible input for us,” confirms Mayer-Heinisch, “his experience and vision open our minds to everything we can achieve.”
To a certain extent, Treichl’s handwriting is also recognizable in Froots’ strategy. “We are concentrating on the part of the financial market that is massively underrepresented in countries like Austria, and that is the stock market,” explains Treichl. “It’s a cultural change, because in Austria we’ve been hearing for decades that the capital market is speculation and only something for the rich. That’s completely wrong and extremely unhealthy. Because over a long period of time, investments in the capital market are always better than interest or other products”.
A belief shared by the two founders. Of course, this does not only apply to Austria. “We think it’s much bigger,” smiles Mayer-Heinisch, who is aiming for 50,000 to 60,000 customers within two years and breakeven in four to five years, “in the medium term we want to become a European story.” A project that Treichl fully supports: “Froots is very cheap for customers, so it has to be big to be successful.”
The article is the trend. PREMIUM edition taken from July 8th, 2022.
