The Berlin-based fintech company Raisin has reported its first-ever profit since its inception 12 years ago. The company's impressive financial performance in 2023 was largely attributed to the influx of €24 billion in new customer deposits, as retail clients sought to capitalize on the rising interest rates.

Raisin Achieves Profitability amidst Surge in Customer Deposits

According to the audited financial results for 2023, Raisin nearly doubled its revenues compared to the previous year, reaching €158.5 million. This substantial growth translated into earnings before interest, tax, depreciation, and amortization (EBITDA) of €20 million, a turnaround from the negative EBITDA of €19 million recorded in 2022.

Furthermore, the company posted an after-tax profit of €850,000, a significant improvement from the €33.8 million loss incurred in the prior year. The company needed more than a decade to record its first net profit in its history.

However, Frank Freund, Raisin's Chief Financial Officer, emphasized that while the net profit might be a one-time occurrence, as the company plans to reinvest the generated cash into marketing and client acquisition initiatives, the company remains committed to maintaining profitability at an operational level.

In a conversation with the Financial Times (FT), Freund expressed confidence in Raisin's long-term strategy, stating that the company aims to increase its revenues by more than 35 percent in the current year.

What is Behind Raisin's Success?

The company operates online platforms across various countries, including Germany, the United Kingdom, the United States, and other European nations. These platforms allow consumers to compare and access a wide range of financial products, such as savings accounts, and directly deposit their funds with partnered banks.

While the service is provided free of charge to retail clients, Raisin generates revenue by earning commissions from the banks that utilize its platform for funding purposes.

The company's growth trajectory is evident in the 74 percent surge in assets under management (AUM), which reached €57.4 billion by the end of 2023. For comparison, a year earlier the AUM of savings products was two times lower. Notably, half of the new inflows originated from clients outside Raisin's home market of Germany, highlighting the company's expanding international presence.

Moreover, the number of banks leveraging Raisin's platform for funding purposes increased by 72, reaching a total of 257.

ETFs Soon, IPO Not Yet

Looking ahead, Raisin has set its sights on diversifying its product offerings, particularly in the realm of investment products. The company aims to attract clients to invest in exchange -traded funds (ETFs), which currently represent only a small portion of its total AUM.

In the meantime, the company has received backing from prominent entities such as Deutsche Bank, Goldman Sachs, Kinnevik, and PayPal Ventures. In March 2023, Raisin successfully raised €60 million in its latest funding round, following its merger with domestic competitor Deposit Solutions two years prior.

Despite the company's strong financial position and investor support, Freund clarified that a potential public listing is not on the immediate horizon. He emphasized that Raisin's investors are not pressuring the company to pursue the capital markets route, acknowledging that it is not yet prepared for a public listing in its current form.