The combined company is to be called Raisin DS.
It will be headquartered in Berlin and will have around 400 banking partners as well as over 500 employees. It’s intended to put an end to the “continuous tug of war” which has left both groups constantly reeling and has ended up with a lot of duplication. Both groups have listed savings accounts and products and let consumers compare offerings.
Thus far, the two groups, which are privately-owned, have raised EUR300 million between them. Two thirds of that came from Raisin, which counts PayPal among its backers.
Deposit Solutions, meanwhile, counts Deutsche Bank as a backer, FT writes.
The companies have not said what their backing is, and Deposit Solutions is the smaller of the two according to FT, with a EUR1 billion valuation since a 2019 round. But both companies have seen strong growth in the past several years. And despite the business rivalry, the executives of both companies have said they share a friendship and think the new partnership could be fruitful. Deposit Solutions CEO Tim Sievers said he thought it could be a merger of equals and he was “very confident we can make that idea work in reality,” the report says.
That said, both companies listed accounts with Greensill Bank, the U.K. supply chain finance group which collapsed recently and is now under criminal investigation. The Greensill collapse raised concerns over business models that link depositors to banks.
Consolidations between payment landscapes have become common in the recent months, PYMNTS writes. Others have included the merger between Italian payments processor Nexi SpA and private equity-owned rival Nets A/S, which will make the biggest payments firm in Europe, along with the combination of FIS and Worldpay and Fiserv and First Data.