The Interview

John and Joe talk again with Luka in our second part of the interview with Penta, the banking app for small and medium enterprises. If you missed it, here is the interview part one, in which we talk about Luka (aka Luke) and the company he co-founded: Penta.

The Founder

This time Luka talks mainly about raising venture capital and his experiences, since he did it already in the US and is right now in the process in Berlin. So he compares the environment in Germany (Europe) and the US. He also points out some important points about raising venture capital.

Further Reading

During the interview we touch:

And here is your link to the (a bit edgy) interview with Edwina from Startupbootcamp Fintech London.


Disclaimer: Joe is a repeated mentor on the Frankfurt pitch days of Startupbootcamp Fintech and our team successfully referred PENTA for the SBC Fintech accelerator in London.


Forbes 30 under 30

Update March 2020: The founder team of Penta was included in Forbes 30 under 30 2020 in Finance (Europe):

quote-luka quote-luka-2 quote-luka-3

© – All right reserved


00:07 Host: Hey, everybody and welcome to a new episode of Your podcast show with startup news and interviews from Germany.

00:16 Jorn: Hello and welcome everybody. This is Jorn from Once again, for you with an all exclusive podcast. This time, I talked to Luca, co-founder of Penta, Berlin-based FinTech. Before that, a little message from our sponsor. Support for this podcast and the following message comes from slack, where work happens all over the world. No more losing time, context switching, more than one thousand apps seamlessly integrate with slack. So, that’s less time jumping between tools and more time to get things done. More at slack dot com. And now I would like to welcome Luca. Hey, Luca how are you doing?

00:56 Luca: Good, good. How are you? Thanks for having me.

00:58 Jorn: I am doing great, thank you. Just one question out of curiosity, do you know slack dot com?

00:06 Luca: Yes absolutely. We use Slack at Penta all day every day.

01:10 Jorn: Do you like it?

01:11 Luca: Yes absolutely. We have an office in Berlin as well as an office in Belgrade, and a few more cities around the world and our whole team communicate over Slack. It has helped to centralize all the communication in the company.

01:29 Jorn: Yeah, it’s the same with us. We’re right now spread between New York where Christian has located me here in Frankford. And Jacob, you will hear him from time to time on health care topics. He’s right now writing his math thesis in Moscow and we still keep in touch with Slack. So, I actually like that too. Nonetheless, we are here because he’s a co-founder of Penta. Get Penta. Many listeners won’t know we did a very long interview with you. I do believe the actual time we’ve been online spread like two and a half hours and we made two, let’s say more or less, short episodes about it that we posted. I do believe it was approximately the same time last year, right?

02:16 Luca: Yeah, I think it was and yes, sometime around now, actually.

02:22 Jorn: Well, bottom line is, you have been an entrepreneur pretty early, I remember you told me you with selling sneakers on the streets of New York. And, you also claim to have paid taxes for it. You’ve been an entrepreneur with a V.C. funded start up where you have been talking about how you did all this traveling around and focusing on the wrong stuff. Pretty interesting interviews. We’ll, of course, have lengths in the show, not here, and now when you’re with Penta. Can you talk a little bit about what Penta is like? A very short version and then we get into our exclusive content.

03:01 Luca: Yeah absolutely. So, for those little don’t know, my name is Luca. I’m a co-founder and head of growth at Penta. What is Penta? So, before I get into what Penta is, briefly. We’ve all had startups, my co-founding team and I, and we realize how much business making can suck. So, we essentially set out to build a digital bank, originally, that helps make the lives of founders easier. So ultimately, we wanted to build a bank account that helps sign up in a couple minutes and gives you access to tools you’ll need to spend less time banking and more time focusing on your business. So, today we’re announcing that we’re live in Germany.

03:44 Jorn: Oh, you’re live in Germany. Ok I see. That’s pretty cool news. How can we actually use Penta? What is your target customer looking like?

03:53 Luca: So, our target customer is high tech companies, two to thirty employees. Or even a bit above that. And they’re based somewhere around Germany. So, at the moment, we have a little over three thousand businesses on the waitlist and we’re adding about one hundred fifty more businesses, for starters, every day. It’s essentially the same target market and the same type of people that use Slack and Throttle. Because, we want to build a bank account for businesses that’s as easy as Slack or Throttle.

04:26 Jorn: I see. So, exactly the right sponsor for this show.

04:30 Luca: Yes. So, over the past couple of months, we’ve been testing with a couple of dozen users and we’ve scaled that number to go above a hundred. And we’re doing some extensive testing to make sure that everything and all works correctly. And today, we’re finally announcing that we are live and we’re going to do our best to accept all the businesses on the waitlist and everybody who has applied to use Penta.

04:55 Jorn: That is pretty cool. What is the difference between Penta and a normal bank account and upfront question argue a bank, now?

05:09 Luca: Ok so, to the last question, we don’t have a banking license. Our partner is actually Salaries bank, it’s a Berlin-based German regulated bank. And through Salaries, we’re able to provide business banking services. However, we own the customer relationship. So, our customer support is directly within Penta, it’s within our team. The banking app is ours. The design is ours. So, when you open a bank account, on the back-end perspective, you’re opening it up with Salaries. But in reality, the only bank you’re going to deal with, in a sense, is going to be Penta.

05:50 Jorn: And, you believe banking needs to be rethought for the count eight? Or, what’s the driver behind initiating Penta.

06:00 Luca: Yes. So, my co-founders and I, we all have startups in the past. For example, in one of my first startups, I often had to leave my office in the pouring, freezing rain to walk to the branch to send money abroad. And that used to cost me four percent per transaction. Even before opening the bank account, for example, with Penta, we essentially tried to open a bank account with six banks and it turns out it’s easier to build, basically, or close to a bank, what panda is, than opening a business bank. Yeah, people often laugh when we say that. So, it’s extremely bureaucratic. We realize that if it’s quicker to build a bank then something must really be wrong with banking.

So, how are really different than normal banks? You can open up a business bank account with us online in just a couple of minutes. And, we’re completely free to open and free to use. We’re not charging any hidden or crazy fees. And we give startups and businesses, our business customers, ten free transactions per month and every transaction after that is ten cents per transactions. And, we’re issuing multiple master cards for the team and we’re working hard now to integrate services like international transfers, automated accounting, cash flow management, and prediction and similar tools like that.

07:30 Jorn: What can you actually do right now with your Penta account?

07:37 Luca: With Penta, you can discover the basics at this moment. You can send and receive money within the sepa zone. You have a business Mastercard and you can open an account in just a couple of minutes online. So, this is basically what we’re calling this live announcement open data. The infrastructure is good. The skill ability is good. We’ve done testing across security and various aspects like that. And now we’re looking to scale the products so that you’re able to do things like send money abroad to whether that’s China or in the U.S. And automate your accounting, automate your invoicing to really make it easy for you so you don’t really have to do any business banking. You can just focus on just your business while Penta will at least attempt to cover most of the business banking tasks that you have to do as a company.

08:29 Jorn: So, you are basically taking away the work from the founders. You automate as much as possible.

08:37 Luca: Exactly. Our goal is the same as Slack’s, just as you mentioned in the beginning. We want to help founders and business owners and even teams, spend less time doing tedious tasks and more time focusing on their business and executing. So, we essentially want to be the Slack of business banking.

08:54 Jorn: Very nice code. I have to admit, on the other hand, I do see banks from the inside from time to time and it’s also no fun for them. They’re basically buried under a mountain of different regulations coming from international oversight bodies like the boss of a council on banking supervision, European oversight, and regulation, where there are three entities who make rules to the German level. And basically, then there are auditors who are checking for the compliance with those regulations. And they have to give regular updates to supervisors and all of this stuff. So, the banks, on the other hand, they are bureaucratic, but I can tell you they’re not being toyed with. They have to do it. Maybe there are some better ways, but they have to comply with regulations. There’s no way around.

09:51 Luca: Yeah, I guess. So, the thing is, when you open a Penta account, it’s no different than opening up a Deutsche account. We offer, as well, a European Deposit Guarantee Fund Insurance. So, your funds are just as insured as in any other regulated banking institution. You have insurance up to one hundred thousand just like in any other bank or we use any standard equipment. So basically, what we’re offering is identical to what any other bank would offer. We’re just much easier to deal with. We’re faster and we’re in the twenty-first century. We’re not stuck in the twentieth century like most banks are.

10:28 Jorn: I see. And basically, what I understood right now you’re running a current account. You control for the client site and you help them automate tasks related to it. And you have credit cards for the client. And basically, you’re a complete online dash o app based bank, if I understood right?

10:56 Luca: Yes. At the moment, we’ve completely redesigned and rethought everything from how somebody can sign up, all the way to dealing or essentially sending money, receiving money and dealing with payments and tasks as well as categorization that somebody does. So, from your first point of entry, we tried to innovate on how we can make the sign-up process easier for businesses. Because often, you have to do checks on our compliance checks on people. How many employees do they have with the shareholders? And, we’re able to do all of that in just under twenty minutes. Actually, we’re the first business banking service offered in Germany that’s able to do that so quickly and completely online. And actually, we’re the first banking service authentic start up that is able to do all these services at once.

11:47 Jorn: And, that’s basically what you offer right now? For many enterprises out there, that would be other services that they would desire. But I assume, you’re looking carefully at them. How they meet your client base and you would then, later on, add them?

12:06 Luca: Yeah exactly. So, we have a huge list of things or features that people are requesting. And, we’re just looking to see what…

12:16 Jorn: Luca, what’s the most surprising feature anybody requested there?

12:22 Luca: Some of the surprising features were like emojis on bank statements.

12:29 Jorn: You’re going to do that?

12:30 Luca: Yes. We were thinking of bigger, better ways to make business banking not just boring and dull. But, we definitely do have that in our backlog, to have emojis on bank statements. Or even for categories and things like that. We have to be professional. People should have fun. It’s not just about being a dull, boring structured big bang. So, it’s looking for innovative ways for the tools to be just as easy and comfortable as using Slack or Throttle.

13:05 Jorn: You are granting credit or overdrafts on this account?

13:10 Luca: So, this is something in our backlog which is aiming for some time in two thousand and eighteen. I don’t have a date but when we started Penta, we sat down, and we interviewed one hundred Startups, exactly the target market. And we actually thought that one of the biggest problems was going to be overdraft and credit. We found that the biggest problems are even smaller. But in fact, they’re bigger. So, it’s opening up a business bank account really quickly or sending and receiving money or actually giving business Master cards or debit cards to the whole team with limits and commissions and who can do what. At the moment, we want to cover the basics. To help people do direct debits really easy. Reoccurring payments really easy. And then, we’re going to look into more complex products that we feel we can deliver more value in, once we cover the basics.

14:03 Jorn: And just for our listener, money just appears on your account and money just leaves your account. It looks pretty easy if you have to just one account. But Luca, I’m sure you can tell the listeners that it’s not that easy especially if you have like hundreds of thousands of accounts. Especially when international transfers get in well right?

14:26 Luca: Yes so, you can get quite complex. Even asking to have multiple accounts or a second account on your bank account, from a bank, can take anywhere between two weeks and six months. Our goal is to bring down the time a bureaucracy from days down to minutes or a maximum couple of hours. So, instead of having, let’s say, five to ten thousand employees and five thousand of those being compliance officers. We’ve limited it for everything to be technology driven and machine learning is driven so that we can essentially make the best outputs to help people bring downtime of getting the services they need ASAP.

15:12 Jorn: That is very interesting, the way you’re actually using AI.

15:18 Luca: So, in some aspects, yes. When we’re identifying you online, we’re using different services to identify your passport. Do you match your passport? How do you look? And in the background were doing money laundering checks as well as other compliance and heavy, boring regulatory stuff. So, we are using some AI and machine learning in the background. However, we want to make that a bit more present on the front end, where we recognize ‘hey we see that you’re sending a lot of money using the service. Why not switch to, for example, transfer-wise, where you can save five percent. So, we want to introduce this AI or machine learning to be present, so we can help people or businesses save money. And, automate a lot of those tasks.

16:07 Jorn: If you can really achieve that that will be something really cool. Do you have any timelines on how you’re going to approach that?

16:19 Luca: Yes. So, as I said before, it’s about covering the basics where we say here’s everything you need to do from reoccurring payments and direct debits. Some of which you need approval from a normal bank. We just wanted to introduce that from day one. And once we cover those basics, we’re going to be getting as much feedback as we can. So, what we’re doing is we’re inviting a lot of startups and founders to come directly to our office in Berlin and do usability testing. And through these interviews, we’re able to prioritize what’s next and what’re the most important features that a business owner will need. So, timeline-wise, it’s a bit hard to judge that. But, we plan to give some transparency to our roadmap in the coming weeks or months so that we get more feedback and more transparent fashion.

17:09 Jorn: And where can the people find the opportunity to sign up or get on your waitlist?

17:17 Luca: If you go to, at the moment, as I said, we have three thousand businesses on the waitlist and we’re growing that number exponentially. But, we’re looking to make sure that everybody can get an account in the next couple of weeks if not next couple of months. So, you leave your email and hope to receive an invitation sometime after the new year. Hopefully, sometime in January.

17:42 Jorn: Sounds pretty good to me. The only thing left for me to say would be Merry Christmas and Happy New Year.

17:49 Luca: Merry Christmas and happy holidays. Thanks for having me.

17:50 Jorn: You’re very welcome and hope to hear back from me soon.

17:54 Luca: Thanks, Jorn. Cheers.