Germany’s Penta is the latest European startup to throw its banking wares into the ring. The burgeoning company is launching a new digital bank account targeting SMEs. Running on top of Banking-as-a-Platform solarisBank, the new offering perhaps resembles something like Tide in the U.K., and is designed to meet all of the banking needs of small to medium-sized businesses, including, of course, startups.
Opening in Beta today, the premise for Penta is that SMEs and startups are currently underserved by banks and that “business banking can be really awful,” co-founder and CEO Lav Odorovic tells me. This typically sees traditional banks make account opening cumbersome and much more difficult than it should be, whilst simultaneously charging exorbitant fees for making payments or international money exchange.
There’s also a long list of other unmet needs, such as tracking employee spending and automating accounting and invoicing. “We ultimately concluded that business owners want a fully digital bank that’s easy to use and that has the apps and products they need to help them scale quicker, save more time and money,” he says.
Through its partnership with solarisBank, Odorovic says Penta is able to offer a full-fledged business bank account, and not a freelance or retail bank account labeled as business, like some other challenger banks do. And, in a nod to marketplace banking, beyond a business bank account, the startup isn’t planning on developing additional financial products of its own to up sell, but instead wants to integrate the best third-party fintechs and other service providers.
“We strongly believe that we can create the most value for our customers by partnering with the best fintech and business app providers and offering their products directly to our customers in our Business App Store,” says the Penta CEO. “Partners can include someone like TransferWise or Revolut for FX, or Debitoor/SMACC for accounting”.
To that end, Odorovic say Penta’s typical customer is a high-tech startup founder who uses Slack or Trello with their team on a daily basis. “Their startup is a team of two or as big as 50 and is building tech that is hopefully solving a problem and making people’s lives easier!.” he says.
This is also reflected in Penta’s pricing model: the digital-only bank is offering a completely free account for “bootstrapped” or very early-stage businesses that doesn’t charge a monthly account fee and provides 10 free transactions per month. Thereafter, each additional transaction costs €0.10 cents per transaction.
“Once you start growing, your business banking needs become more complex. You may need to start doing your accounting, send or receive money from abroad, manage your cash-flow better, or do payroll. So we’ll offer you these products via our Penta Business App Store. We call this: Pay as you Grow,” says Odorovic.
For now, Penta is only available to businesses registered in Germany. The startup bank plans to go Europe-wide next year.