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How the Greensill Capital Collapse touched the German Fintech Scene — Founder Interview

Updated: Apr 30

This story was migrated from our old blog, originally published on March 12th, 2021.

What Is This About?

The collapse of Greensill Capital, an aggressive supply chain finance fintech, sent shockwaves through the German financial system. This episode traces how the implosion touched German fintech companies, exposed regulatory gaps, and raised questions about the risks of rapid fintech scaling.

  • This story was migrated from our old blog, originally published on March 12th, 2021.

  • This blog post first appeared first on old medium publication (https://medium.

  • Greensill was a fintech — called aggressive and controversial by some -, specializing in supply chain financing, especially in the steel industry in the UK and Australia.

  • In 2018 New York-based PE company General Atlantic invested 250 m US$ and in 2019 Softbank invested 800 m US$.

  • Today’s Greensill Bank is an institute with a long history.


How the Greensill Capital Collapse touched the German Fintech Scene — Founder Interview Startuprad.io brings you independent coverage of the key developments shaping the startup and venture capital landscape across Germany, Austria, and Switzerland.

This story was migrated from our old blog, originally published on March 12th, 2021.



New Blog

This blog post first appeared first on old medium publication (https://medium.com/startuprad-io), and was moved to this blog with the relaunch of our website in summer 2024.


Greensill was a fintech — called aggressive and controversial by some -, specializing in supply chain financing, especially in the steel industry in the UK and Australia. They have been headquartered in the UK, in Northwich (close to Manchester). The company was founded by Lex Greensill in 2011. Greensill bought invoices from companies and bundled them in bond-like securities. They financed fraudulent NMC Health and were involved in the collapse of GAM funds as well, according to press reports.


In 2018 New York-based PE company General Atlantic invested 250 m US$ and in 2019 Softbank invested 800 m US$. Greensill has been deeply involved with Zurich-based Credit Suisse (think bond-like securities), whose retreat appears to have triggered the collapse.


You can read more about them here and many other articles:


Greensill Bank in Germany



Today’s Greensill Bank is an institute with a long history. The bank is located in the northern city of Bremen. It was founded in 1927, after the hyperinflation of the Weimar Republic as Norddeutsche Finanzierungs-AG. After being bought and sold several times, Greensill Capital bought an 80% stake in the bank in 2014.


After the transaction, the bank was rebranded as Greensill Bank. The bank offered in an environment of zero or negative interest “good” interest rates. This lured in savers for time deposits and sight deposits.


Now BaFin declared a moratorium on March 3rd due to suspected overextension. Bafin suspects Greensill Bank was cooking their books and filed criminal charges after a forensic audit by KPMG. The books of Greensill Bank have been audited before by Ebner Stolz, a midsized auditor with more than 1.700 employees, headquartered in Stuttgart.


Due to the moratorium, no money can be retrieved, which is invested in the bank (e.g. deposits). This is one of the largest cases of bank closure in Germany in the last 20 years. Of those only, the German depandance of the Kaupthing Bank re-opened again. In the next six weeks, Bafin has time to decide if the bank will be opening again or the “Entschädigungsfall”. Entschädigung means compensation and in such a case the fund of Germany’s private banks, as well as the government will step in and compensate. All retail savers will get their money likely back. The German government guarantees all savings up to 100.000 € and the remaining money will have to come out of the fund of private banks. Multiple municipalities have deposited money there as well, several million in each known case (e.g. Hessen’s Capital Wiesbaden fears for 20 million Euros). The municipalities don’t have a great chance to see all of their money again.


This brings us to the impact on German Fintechs



The two fintechs Weltsparen (a local brand of raisin) and Zinspilot (Deposit Solutions) are headquartered in Germany and earn money brokering deposits for German retail investors mostly across the European Union. Both brokered retail deposits to Greensill, as well as the platform Check24.


All of them together are suspected by Handelsblatt to have brokered “hundreds of millions” in deposits to the bank. Now, this led to criticism by politicians, comparing it to another blow for fintechs in Germany, after Wirecard (Danyal Bayaz). In an interview, Tamaz Georgadze defends his company Raisin (you can listen to our interview from 2017 with him here). He states (as we think correctly) that looking from the outside the bank was well capitalized and that the business of the deposits brokers is not the auditing of books of banks.


We agree with his statement since banks have a compliance department, internal audit, external auditors, as well as the oversight of BaFin, all put in place to avoid bank collapses and ensure compliance with all rules and regulations.

Note that most of the deposits (like the City of Wiesbaden) were channeled through more traditional brokers than the fintech platforms. It seems unlikely that the fintechs have done anything wrong.


Further Readings:



Article in Handelsblatt with the statement of Danyal Bayaz


Another article in German, which sparked the interview with Tamaz



Finally the take of FT in English




How Did the Greensill Collapse Affect German Fintech?

Greensill Capital, a supply chain finance fintech backed by General Atlantic ($250M in 2018) and SoftBank (2019), collapsed spectacularly. The fallout touched the German fintech scene through Greensill Bank, a German-regulated institution with a long history. The collapse raised questions about supply chain finance, fintech regulation, and the risks of aggressive growth strategies in financial services.

Introduction

Originally published March 12th, 2021, this episode examines how the Greensill Capital collapse impacted the German fintech ecosystem. Greensill was a supply chain finance fintech described by some as aggressive and controversial. General Atlantic invested $250M in 2018 and SoftBank followed in 2019. The German connection came through Greensill Bank, a regulated institution with a long history that became entangled in the parent company's downfall. The episode explores the regulatory implications and lessons for the German fintech scene.

The Greensill Capital collapse sent shockwaves through the global fintech ecosystem, with particular implications for Germany through Greensill Bank. The supply chain finance company had attracted major investors — General Atlantic ($250M, 2018) and SoftBank (2019) — before imploding. Greensill Bank, a German-regulated institution with a long history, became a casualty of the parent company's aggressive strategies. The episode analyzes how this event affected trust in fintech and supply chain finance, and the regulatory lessons for the German market.

  • Greensill Capital, a supply chain finance fintech, collapsed after raising from General Atlantic ($250M, 2018) and SoftBank (2019).

  • The collapse directly impacted the German fintech scene through Greensill Bank, a regulated German institution with a long history.

  • Greensill was described as aggressive and controversial in its approach to supply chain finance.

  • The event raised important questions about fintech regulation and the risks of rapid growth in financial services.

Entities Referenced in This Episode

  • Greensill Capital — Supply chain finance fintech, collapsed

  • Greensill Bank — German-regulated bank, long history, impacted by parent collapse

  • General Atlantic — NY-based PE, invested $250M in Greensill (2018)

  • SoftBank — Invested in Greensill (2019)

  • Topics: Supply chain finance, fintech collapse, banking regulation, PE investment risk

Quote Highlights

  • "The collapse of Greensill Capital sent shockwaves through the German financial system, tracing how the implosion touched German fintech companies and traditional banking institutions alike."

  • "Greensill was a fintech specializing in supply chain financing, especially in the steel industry — called aggressive and controversial by some."

  • "Greensill Bank was a German-regulated banking institution with a long history that became entangled in the Greensill Capital collapse."

  • "The Greensill Capital collapse sent shockwaves through the global fintech ecosystem, with particular implications for Germany through Greensill Bank."

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Who is Greensill Capital and what is their role?

Greensill Capital was a supply chain finance fintech that collapsed in early 2021. The company had raised significant capital from General Atlantic and SoftBank before its aggressive strategies led to its downfall.

Who is Greensill Bank and what is their role?

Greensill Bank was a German-regulated banking institution with a long history that became entangled in the Greensill Capital collapse. Its German banking license and regulated status made the failure particularly significant for the German fintech scene.

About the Host

Joern "Joe" Menninger is the host of the Startuprad.io podcast and covers founders, investors, and policy developments across the DACH startup ecosystem. Through more than 1,300 interviews and nearly a decade of reporting, he documents the evolution of the European startup landscape. Follow Joern on LinkedIn.

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Companies building in fintech and financial infrastructure use Startuprad.io to reach founders, investors, and decision-makers across the DACH ecosystem. If that fits your goals, explore partnerships here: Partner with Startuprad.io

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