The biggest investment in fintech startup in Slovakia goes to Finax

LRJ Capital through its fund GROWWS SICAV, a.s. entered with an investment of 1.5 million euros into Finax, the innovator in Intelligent Investing. Finax will use this investment to expand Slovak innovation into the world and for further technological development.

Juraj Hrbatý | News | 13. November 2019

In the beginning we had a dream. In a year we managed to make it a reality and Finax Intelligent Investing was born. After two more years of hard work, we are experiencing another significant milestone - we have signed an agreement with a major investor that will move us to the top investment league.

After the launch of Finax, we received a few partnerships offers in a short amount of time. Because we were aware of the fact that the atrocious situation with financial products is not only in Slovakia, but it is also spread out across Central and Eastern Europe. We understood the partnership with a larger partner as an opportunity for foreign expansion and scaling, which will enable us to provide even better products and investment terms for our clients.

This is the biggest investment in fintech startup in the history of Slovakia

We agreed on a partnership with a major venture fund GROWWS SICAV a. s., whose major shareholder is the investment holding LRJ Capital. GROWWS is a professional venture fund whose chairman is Peťo Irikovský. Peťo built the Slevomat Group (recently sold for more than € 60m) and is now managing Exponea, one of the largest Slovak technology startups.

In addition to Peťo, is the fund also owned by Ivan Chrenko, owner of the HB Reavis development group, who, according to Forbes, is currently the richest Slovak living in Slovakia. Another partner is Michal Pastier, who co-founded Zaraguz and BigName.

The GROWWS fund enters into Finax with an investment of 1.5 million euros, and based on our information it is the largest investment in fintech startup in the history of Slovakia.

The agreement with the investor was signed this week. Currently, an application is submitted to the National Bank of Slovakia. The NBS must approve the investor's entry. Once approved, the transaction may be sealed.

What does this investment mean for Finax?

Expansion - Finax wants to expand to Central and Eastern Europe. In the first half of the year we plan to enter markets in Hungary and the Czech Republic. In the second half of the year we plan to offer our services in Poland. These are the markets where the investor has a strong presence and that can help us with the expansion when looking for quality people with market experience or offices.

Corporate Finance - HB Reavis Group is today the largest domestic issuer of corporate bonds. With HB Reavis know-how we want to build the largest corporate finance department in Slovakia. The goal of it will be to compete with banks in the financing of small and medium-sized enterprises through the issue of equities and bonds.

Promoting the Slovak innovation environment - The investor has recently invested in the development of the innovation environment in Central Europe. HubHub is the embodiment of innovation. We want to support major startups by helping them with financing and finding investors.

Technological expansion - a significant part of the investment will be used for further technological development of Finax. We want to continue to be a leader in delivering technologically flawless services. Our plan is to start using artificial intelligence tools to improve personal finance management.

Focusing more on creditworthy clients - we realize that passive investing can be boring for most people. In addition to the boring investments that make up their portfolio, the more creditworthy clients also wish to spice up their portfolio. This will be ensured for them through Finax with interesting products, or by investing in startups.

Products for businesses - the offices built by HB Reavis are the business addresses of many significant companies. Therefore, we will focus our attention on creating quality and efficient corporate investment products for companies and their employees. This partnership will greatly simplify access to business customers.

Maintaining independence - the agreement clearly states that the new investor will not interfere with the operation of Finax. The management of the company remains fully in the hands of the current management. Exceptions are only fundamental strategic decisions that would steer Finax away from the current direction.

What does this investment mean for Intelligent Investors?

Trust building -investment of such an important group in Finax is a sign of great confidence in what we do. This is the Fund's first investment, to which all of its advisors have unambiguously and immediately agreed. The most influential entrepreneurs will become part of Finax, and this trust elevates us to the highest league among traditional Slovak investment service providers.

The guarantee of stability - the investment guarantees that Finax will survive the most difficult period, which is always the beginning and the first few years. We are getting enough funding for further development and as a result we will compete for a significant part of the market share.

Security and transparency – with the entry of a partner, holding 50% of the shares, the transparency of the company will significantly increase and with it will also increase the investors ability to supervise management.

Our feelings

Of all the possibilities, the partnership with the GROWWS Fund has made the most sense in terms of synergies. Personally, I was mostly impressed by the significant increase in business scalability. Not only the ability to compete in Slovak market, but also the opportunity to become a leader in Central Europe.

Many people praise us for putting our heart and passion into our work. We notice, that our products open people's eyes and finally give them ability to build their assets cheaply and effectively. With the expansion we can help a larger group of people than we originally expected. We have been given tools and capabilities, in addition to the passion and heart. We have been given a new impulse and motivation that will drive us forward for another long period.

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