Building Europe's Fintech Future with 0TO9
Building a fintech business in Europe can be a long and complex journey, often taking years due to stringent regulations and operational hurdles. This is precisely the challenge that 0TO9 was founded to address. Its core mission is to expedite this process, providing entrepreneurs with the essential tools and support needed to successfully launch and expand regulated financial technology companies.
Jessica Holzbach, a prominent partner and CEO Germany at 0TO9, offers profound insights into this venture. She reflects on the strategic launch of the firm's DACH hub and recounts her impressive career trajectory, evolving from a student founder to a co-founder of notable fintech entities like Penta and Pile. Holzbach's perspective underscores why the current economic climate presents an opportune moment to champion and invest in a new wave of European fintech innovators. Her vision is clear: to streamline the path for new fintechs, ensuring they can flourish amidst a complex regulatory landscape.
About 0TO9: Empowering Fintech Innovation
0TO9, an acronym for Zero to Nine, operates as a pioneering fintech venture builder and investor. The company harbors an ambitious goal: to establish and scale 1,000 profitable fintech companies by the year 2045, with the ultimate aim of positioning Europe as the global epicenter for financial technology. The genesis of 0TO9 stems from a recurring observation within the industry: promising fintech founders frequently find themselves ensnared by regulatory complexities for extended periods. This often leads to critical funding depletion and a loss of competitive edge against international counterparts.
The team at 0TO9 recognized that founders typically lack the time and dedicated resources to effectively navigate and adapt to the constantly evolving regulatory environment. New EU directives, such as MiCA, DORA, and AMLA, demand continuous attention, diverting focus from crucial business growth activities. While these market barriers can be a source of frustration, 0TO9 acknowledges their indispensable role. Robust regulatory frameworks are vital for consumer protection and for fostering the development of stronger, more resilient business models within the financial sector.
To overcome these challenges, 0TO9 devised a comprehensive solution: to furnish entrepreneurs with a complete operational infrastructure. This ecosystem is designed to facilitate the establishment and growth of licensed businesses, encompassing a wide array of support services. From critical legal and compliance guidance to essential technical assistance, capital provision, and robust go-to-market strategies, 0TO9 ensures that fintech founders are equipped with everything they need. This holistic support allows them to concentrate on their core strengths: innovating and delivering exceptional products, and scaling their businesses efficiently. With 0TO9's integrated approach, the journey from conception to a successful fintech operation is envisioned to transition from years to mere months.
Recent Achievements and Milestones
Among Jessica Holzbach's most notable recent accomplishments is the successful launch of 0TO9's German hub in early September. In this pivotal role as CEO and partner for the DACH region, she spearheaded the creation of a dedicated team committed to advancing the company’s mission. This period is particularly exciting for fintech development across the continent, as the sector shows promising signs of recovery following an eight-year investment hiatus. This initiative by 0TO9 serves as a clear demonstration of their proactive efforts to reverse this trend and re-establish Europe’s standing in the global fintech landscape.
Since the establishment of the German hub, Holzbach has collaborated closely with exceptional entrepreneurs in Berlin, aiding in the launch of six portfolio companies. Impressively, one of these ventures achieved profitability in just four months, and another within five. Such rapid success underscores 0TO9's agility and effectiveness in initiating and scaling new businesses. This swift progress is crucial for meeting their ambitious target of building 1,000 profitable fintechs by 2040. Holzbach emphasizes that the continent possesses abundant talent and ambition; the key is providing founders with the precise toolkit for success, which 0TO9 endeavors to do.
Journey into Fintech
Jessica Holzbach’s foray into the fintech industry began during her university years, where she cultivated a deep fascination with finance. She was captivated by the fundamental role financial flows play as the lifeblood of innovation and industry, consistently perceiving the boundless opportunities they present. Following her academic pursuits, she made a definitive decision to build a company from the ground up, driven by an entrepreneurial spirit.
Her initial entrepreneurial endeavor involved founding a company that imported acai berries. While this venture ultimately did not align with her core passion, it provided invaluable lessons that proved instrumental in her subsequent venture: Penta. Penta emerged as Germany’s largest online business bank, and under Holzbach’s leadership, it rapidly scaled to serve 70,000 SME customers, successfully raising over $80 million in venture capital, and building a robust 300-person team. The company was eventually acquired by Qonto, a leading European SME business banking platform, marking a significant milestone in her career.
Post-Penta, Holzbach co-founded Pile Capital, a treasury management platform specifically designed to support high-growth startups and venture capital firms. Just two years later, Pile was successfully sold to Vivid Capital. Now, she expresses immense enthusiasm for her current role with 0TO9, where she can leverage her extensive experience to assist others in launching and scaling their fintech ventures. She finds deep gratification in collaborating directly with talented individuals, contributing to the development of a future-proof finance industry.
The Allure of Fintech
One of the most compelling aspects of working in the fintech industry, according to Holzbach, is its inherently disruptive nature. Banking, as one of the world's oldest industries, has undergone countless transformations, from the earliest forms of barter to the adoption of fiat money. This long history means that outdated and inefficient business practices are prevalent, creating a vast fertile ground for new companies to innovate and introduce superior solutions.
Beyond the technological and structural disruptions, it is the human element that truly resonates with her. Fintech, at its core, is about enhancing people’s access to high-quality financial products and services. This improved access, in turn, empowers individuals to achieve a higher standard of living within the modern economy. For Holzbach, discovering and implementing ways to ensure that the financial system and its institutions genuinely serve everyone represents the most rewarding work imaginable.
Frustrations and Evolving Standards in Fintech
Reflecting on the fintech landscape in 2021, particularly during the era of zero interest rate policy and a concomitant funding boom, Holzbach recalls a period marked by what she perceived as low standards of excellence. Despite record levels of investment, the industry was characterized by a superficial hype. Many entrepreneurs launched fintech SaaS companies simply because it was considered fashionable, rather than driven by a deep-seated vision. She vividly remembers a market saturated with companies lacking genuine purpose, contributing to an impression of superficial opportunism within the industry.
However, Holzbach currently finds the industry more engaging and fulfilling than ever before. There's a renewed seriousness about fintech's potential to profoundly impact people's lives and its capacity to integrate seamlessly with other technological verticals, such as health tech and e-mobility. The present environment demands that companies adopt a bold and distinctive approach to fintech; otherwise, they face obsolescence. This explains why later-stage fintechs, having demonstrated proven success, are currently attracting the majority of funding, while early-stage companies are compelled to present more compelling and robust pitches.
This "flight to quality" is, in her view, a welcome development. Companies that can exhibit strong metrics are now more likely to secure the necessary capital for scaling. Holzbach sees a significant opportunity to make a meaningful and lasting impact within the industry, which fuels her excitement for the current moment.
Influence of Past Roles
Jessica Holzbach firmly believes that all prior experiences lay the groundwork for subsequent endeavors. Her initial venture, an acai online shop, directly led her to encounter the significant difficulty of opening a business bank account – a problem that became the direct impetus for founding Penta. Without Penta, the concept for Pile would likely never have materialized. This chain of experiences highlights the interconnectedness of her entrepreneurial journey.
Crucially, she learned that the most vital component for success is the team. The individuals one chooses to surround themselves with – be they employees, co-founders, investors, or advisors – are paramount. She expresses gratitude for having learned what truly constitutes exceptional talent and is committed to applying these high standards to every new undertaking. Her greatest joy lies in assembling the most talented individuals, fostering an environment where they have the freedom to be creative, and witnessing the innovative companies and products they develop to solve real-world problems.
The "Best Mistake"
Holzbach candidly describes her very first angel investing ticket as a technical financial mistake. Although the sum was modest, witnessing the company fail just two years later was a painful experience. Nevertheless, that initial investment provided her with invaluable insights into the intricacies of the ecosystem. Determined to learn from this setback, she focused on identifying strategies to mitigate such risks in the future, which subsequently led her to a scouting position at EQT Ventures.
It was through this scouting role that she crossed paths with Siduri, who would later become 0TO9's CMO and partner. Siduri eventually approached Holzbach to join 0TO9. Therefore, in the broader scheme of her career, this initial "mistake" proved to be the best one she ever made, serving as a powerful catalyst. It reinforces her belief that often, it is the challenging lows that serve as crucial springboards to reaching significant highs.
Future Vision for 0TO9
Looking ahead, 0TO9 is poised to establish the first truly European bank of entrepreneurship, aiming to solidify Europe’s position as the global leader in financial services. From its inception, the company has prioritized entrepreneurs and innovation, committing to remain an agile organization dedicated to supporting them in every conceivable way. 0TO9 is envisioned as the new and significantly improved iteration of distributed banking, designed to empower a new generation of financial innovators.
Industry Challenges: The AI Imperative
The primary challenge confronting the fintech industry, and 0TO9 as an organization, is the imperative to keep pace with the rapid advancements in Artificial Intelligence. The focus is on discovering the most effective methods to seamlessly integrate this transformative technology into daily operations. While AI presents immense opportunities, it also carries inherent risks, especially when dealing with people’s money. This brings forth critical questions regarding ethical AI practices and the judicious assignment of financial oversight, balancing human expertise with technological capability.
Holzbach emphasizes that the risk does not lie in AI itself, but rather in how it is utilized. Moreover, she stresses that opting not to embrace AI is simply not a viable option for the future of the industry. The careful and ethical integration of AI will be crucial for navigating the evolving financial landscape.
