European insurtech company Getsafe has made yet another move towards expanding its reach, by acquiring deineStudienfinanzierung, a German digital platform for student loans. Interestingly enough, this platform has made waves and captured attention in Germany, notably making an appearance on the local version of Shark Tank in 2019.
Just a few months prior to this, Getsafe also acquired the German portfolio of French insurtech company Luko. This has resulted in a significant increase in Getsafe’s user base, which now stands at over 550,000 customers. However, this acquisition has brought more than just new clients for Getsafe.
According to TechCrunch, Getsafe CEO Christian Wiens has stated that the team at deineStudienfinanzierung, which consists of about 10 people, will remain employed and the platform will continue operating as a separate entity after the acquisition.
“With deineStudienfinanzierung, we are now a relevant fintech player for students,” Wiens said.
What sets deineStudienfinanzierung apart from other companies in the same industry is its focus on assisting students with applying for publicly subsidized loans offered by German state bank KfW. This platform has helped over 200,000 students secure study financing worth more than €1 billion since its inception.
It is interesting to note that this amount, averaging to less than €5,000 per student, is significantly lower compared to the average student loan amount in the United States.
Why is this the case? According to Wiens, in Germany, student loans are mainly used to cover living expenses rather than tuition fees, as most universities in the country do not charge tuition. However, due to the lockdowns caused by the COVID-19 pandemic, there has been a spike in demand for student loans as many students were unable to work part-time jobs to support themselves.
“COVID boosted demand for student loans because many students could not perform their side jobs due to the lockdowns (e.g., working in bars and restaurants). Many lost their main source of income overnight and had to turn to alternative ways to cover their living expenses. The financing volume has returned to previous levels since.”
What makes both Getsafe and deineStudienfinanzierung stand out is their digital-first approach, which resonates well with the younger generation.
While the two companies will continue operating separately, Getsafe is optimistic that there will be synergies between them. According to Wiens, by acquiring deineStudienfinanzierung, Getsafe is positioning itself as a leading fintech player for students.
“The issue with banking is that most customers already have a bank account from an early age. By the time customers apply for a student loan, the barriers to switch are quite high. However, with insurance, it is different. It is not uncommon for young people to deal with insurance for the first time in their mid-twenties,” deineStudienfinanzierung’s founder, Bastian Krautwald, told TechCrunch.
Interestingly, Krautwald is also the co-founder of another fintech company, Wajve, which was later rebranded to OWWN. It was a banking product aimed at the same customer base as deineStudienfinanzierung, but it never made it past its testing phase. Instead, OWWN partnered up with neobank N26 to offer a special discount to its beta users and those on its waiting list.
Wiens also revealed that with the acquisition of deineStudienfinanzierung, Getsafe aims to get better acquainted with its future clients. As most students who secure loans with deineStudienfinanzierung take an average of two years to find a job, it presents an opportunity for Getsafe to be their insurer of choice.
“We realized that to become their insurer of choice, we must think one step ahead.”
When it comes to insurance, in a country where it is not compulsory, many young people only consider getting it once they enter the job market. As such, Wiens believes that deineStudienfinanzierung’s users may be more inclined to think about insurance compared to the average first-time employee, due to the financial risk associated with repaying student loans and relying on a stable income.
When asked if insurance was a better fit for deineStudienfinanzierung than banking, Wiens agreed, stressing the ease of switching between insurance providers compared to banks.
Getsafe’s latest acquisition has been that of its parent company, FiRec GmbH, which raised €5 million in funding from investors such as EQT Ventures, 468 Capital, and finleap. Krautwald will continue to serve as CEO of deineStudienfinanzierung, as Getsafe looks to grow its reach and access more European markets.
We cannot predict if Getsafe will make any more acquisitions in the near future, but they have expressed their readiness to explore and pursue opportunities as they arise.
We look forward to seeing how this latest acquisition will help strengthen Getsafe’s position as a leading provider of insurance to young people in Europe.
