Feb 16, 2024 · 59m · news
Christian Hecker & Johan Brenner: The Biggest Fundraising Lessons Having Raised $1.3BN | E1116 · 20VC with Harry Stebbings
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of 20VC, host Harry Stebbings interviews Trade Republic co-founder Christian Hecker and Creandum partner Johan Brenner to explore the fintech's journey from surviving 200-plus early VC rejections to raising $1.3 billion. The discussion dives deep into restructuring heavily diluted cap tables, leveraging the European pension crisis to drive product-led growth, and mastering board governance and scaling strategies.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Harry holds 21.5% of the talking time here. How this is scored →
Harry as informed peer 4.6 Guest teaching 3.7 Guest disagreement 2.0 Harry pushing back 3.2
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 43:50 Reframing micromanagement as hands-on leadership
When Harry brings direct criticism from Christian's team about micromanagement, Christian forcefully reframes the behavior, declaring that the company banned the word micromanagement in favor of hands-on execution.
Hardest push from Harry ▶ 21:09 Harry challenging millennial wealth generationHarry refuses to accept Christian's optimistic premise about 30-somethings accumulating wealth, pointing to unaffordable housing and luxury consumer spending as evidence that young people squander wealth.
Biggest teaching moment ▶ 18:24 Correcting the Robinhood day-trading narrativeChristian educates Harry on Trade Republic's core economics, clarifying that unlike Robinhood, they do not encourage frequent trading and instead measure success through automated monthly recurring ETF deposits.
Harry holds his own ▶ 30:49 Challenging VC price elasticity claimsHarry calls out Johan's perspective on seed valuations, citing recent conversations with top seed investors to challenge whether VCs are truly as price elastic as they claim.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| Guest Introductions and Professional Backgrounds | 3 | 1 | 1 | 1 | A friendly introductory exchange where the host asks about initial impressions and guest backgrounds. Johan candidly shares his early skepticism regarding European retail investing before meeting the founders. | |
| Pitching, Rejections, and the Bootstrap Phase | 2 | 3 | 1 | 1 | Christian outlines the difficult early years from 2015 to 2018, describing over 200 VC rejections and winning bank hackathons to bootstrap operations until securing a banking license. | |
| Product Marketing Challenges and the Pension Gap Thesis | 4 | 4 | 2 | 3 | Harry asks whether the early rejections stemmed from poor product marketing or VC shortsightedness. Christian reframes the issue around the timing of mobile banking and structural pension gaps in Europe. | |
| Realistic Founders vs. Billion-Dollar Visions | 5 | 4 | 2 | 3 | The conversation covers founder vision versus pragmatic execution before diving into Trade Republic's early mistake of giving up 75% equity to an angel investor, which Creandum later helped restructure. | |
| Practical Cap Table Advice for Early-Stage Founders | 4 | 3 | 2 | 2 | Christian offers realistic cap table advice, arguing early founders rarely have leverage. Johan elaborates on the regulatory and operational risks Creandum underwrote when investing. | |
| Organic Virality and Customer Loyalty in European Banking | 5 | 4 | 2 | 3 | The discussion explores unit economics, organic word-of-mouth growth, and low customer churn in Europe. Christian clarifies that Trade Republic measures success through recurring deposits rather than high-frequency trade counts. | |
| Growing Wealth alongside the Under-35 Demographic | 6 | 5 | 3 | 6 | Harry challenges the thesis that under-35s build wealth in their 30s, citing housing unaffordability and lifestyle spending. Christian counters by emphasizing Europe's lack of state pension incentives and high young disposable income. | |
| Gym Subscriptions, Churn, and the ETF Savings Plan | 4 | 3 | 2 | 4 | Harry uses dark humor to push back on young adult wealth outlooks before asking about subscriber churn and revenue per user, which the guests lightheartedly deflect. | |
| Building Investor Relationships and Meeting Sequoia | 4 | 3 | 1 | 2 | Christian recounts raising $1.3B across rounds, including an informal COVID-era terrace meeting with Doug Leone of Sequoia, and how pitch narratives evolved as scale expanded. | |
| Balancing Capital Cushions with Pricing Sensitivity | 5 | 4 | 2 | 4 | Harry probes the tension between raising opportunistic capital versus disciplined dilution. Johan admits that the best investments often felt expensive at the time. | |
| Strategic Fundraising in a Challenging Macro Environment | 5 | 4 | 2 | 3 | Christian explains fundraising during a down market when competitor Robinhood was down 60%, highlighting how Trade Republic's growing asset base and sticky savings plans convinced Ontario Teachers'. | |
| Regulatory Barriers and Robinhood's European Threat | 5 | 4 | 2 | 3 | The conversation moves to competition and potential threats from Robinhood entering Europe. Christian downplays the threat due to regulatory barriers and differing core user behavior. | |
| Involving the Executive Team and Board Appraisals | 5 | 3 | 2 | 3 | Johan and Christian discuss board governance, executive inclusion, and equalizing board member voices, with Johan noting that investor boards rarely evaluate their own efficacy. | |
| Hands-On Leadership and Grooming an Executive Team | 6 | 4 | 3 | 5 | Harry confronts Christian with feedback from his own team regarding a micromanaging leadership style. Christian humorously reframes it as hands-on leadership essential for product-driven founders. | |
| Quick-Fire: Early Hires, Operator Mistakes, and Unit Economics | 4 | 4 | 2 | 3 | In a quick-fire round, Christian reflects on early hiring struggles and reveals that shutting off performance marketing ad spend had zero negative impact on customer acquisition. | |
| Creandum's Anti-Portfolio and the Power of the Pivot | 6 | 4 | 3 | 4 | Johan shares Creandum's anti-portfolio mistake with Tink's pivot, and Christian agrees with Keith Raboy's critique that European startup value creation largely enriches foreign capital. | |
| A Bullish Counter-Perspective on European Capital and Talent | 6 | 5 | 3 | 5 | Johan defends European startup potential while criticizing regulatory overreach. Harry asks if European talent lacks hunger, prompting Christian to explain Trade Republic's intense performance culture. | |
| The 10-Year Bull Case and the Capital Market Future | 4 | 4 | 1 | 2 | Both guests share their long-term bull case for Trade Republic, visualizing it as the Charles Schwab of Europe designed to solve the impending continental pension deficit. |
Statements from this episode (47)
Hecker: Trade Republic sold 75% of the company in €600K angel round
“And then we raised the 600,000 euros back then and sold 75% of the company.”
Hecker: Founders rarely have a choice when setting early cap tables
“I think it's important to acknowledge that most of the time you don't have a choice.”
Brenner initially refused to evaluate Trade Republic in March 2019
“My colleague came to me one evening in, in, in March, nine, 2019 and said, we have this opportunity to look at a Robin Hood of Germany. Do you want to take a look? No, I said, and that was a, that was, so I said to myself, this is, this has been around for 25 …”
Hecker pitched over 200 VCs before raising for Trade Republic
“Between, I think, 2015 and 19, I met over 200 VCs.”
Trade Republic bootstrapped until securing a banking license and 10,000 customers
“And so then we bootstrapped the rest between 2000 17 and 19. And once we had our banking license, And the first 10,000 paying customers, the VCs were all very excited all of a sudden and wanted to invest.”
Hecker: Startup failure is always the founder's fault, not investors'
“If you fail, it's always your mistake, right? So you, you're not here to blame any other person.”
Hecker: Broken European pensions will force millions to invest over 20-30 years
“The statutory pension system we have in continental Europe is inherently broken, and that thesis suggests that basically in the next 2030 years, millions of people are going to start investing.”
Hecker: A brokerage business can be profitable with 80,000 clients
“As a brokerage business, you can be very profitable, meaning with 80,000, 100,000 clients, you can be a small profitable salary paying company, right?”
Christian Hecker: Trade Republic's student competition attracted 15,000 users overnight
“And all of a sudden we had 15,000 people using the product overnight, right?”
Brenner: Creandum required restructuring Trade Republic's cap table to increase founder equity
“This was actually a deed breaker for us in the end, because we really wanted to see Christian and the team own enough to be able to have, you know, sufficient as a founder to stay with the company long-term.”
Hecker: Trade Republic gets 65% of customers through organic word-of-mouth
“So it's still today we get 65% of customers for free through organic growth and word to mouth.”
Hecker: European bank customers rarely churn, creating unexpectedly high LTV
“So basically, as Johan said, I think we overly underestimated how cheap we can acquire customers and how big the LTV is because another fact, which is a great pro and a contra in the European banking market is it's hard to acquire customers, but once you have …”
Hecker: Trade Republic refuses campaigns designed to boost trading frequency
“And actually we're not looking at it to it at all. So in any product manager It comes to me and suggest that we should an engagement campaign, helping people to invest more, more often, more frequently. We don't do it.”
Hecker: Trade Republic prioritizes total assets and recurring deposits over trading spikes
“So eventually if we go to the board, The first one we talk about is assets, total assets. The second number is a recurring deposits over time, because we believe that's the biggest predictor for sustainable activity, because I'd rather have millions of people …”
Hecker: Average Trade Republic user is 28-30 with €8,000 balance
“The average trader public client is, let's say, 28, 30 years of age, right? This person already holds an average 8000 euros with the account.”
Hecker: Trade Republic will become Europe's Charles Schwab or UBS
“So if we can just grow with these people, you're going to be the Charles Schwab, the UBS of Europe in 2030 years.”
Hecker: Trade Republic manages €35 billion in customer assets
“Trade public today has thirty five billion euros of assets because of that fact, because all these young people deposit money on a monthly basis.”
Hecker: Trade Republic customers keep 40% of their private wealth on platform
“When we survey our customers we see that they have 40% of their private wealth with us. It's a KPI. No challenger bank comes anywhere close, right?”
Hecker: Trade Republic's average account balance reaches €25,000 after three years
“So again, like the average account size is 9010 thousand euros. And this is the average. Basically, if you look into cohorts, which are with the company for two or three years, the average accounts is 25,000 euros.”
Hecker: Free ETF savings plans retain users through gym-subscription guilt
“So you subscribe to a ETF basket, so to say, and you put in money monthly, and this is something people almost never really quit, right? So you set up 203 hundred euros per month, and you just deposit money with this savings plan. And it's a bit like a fitness…”
Hecker: Trade Republic built 1-2 year relationships before adding VCs to cap table
“And I think any investor which we picked, we've built a relationship for over a year or two years, right?”
Brenner: Trade Republic's 2023 revenue hit 5x Creandum's Series A plan
“In 20, 23, we're five X the plan that was presented to me on the, on, on top line.”
Brenner: All of Creandum's best startup investments were expensive at entry
“I think if we look back at all our investments and the ones that have been fantastic it's, they've all been expensive.”
Brenner: Trade Republic had just 1,000 customers during its $10M Series A
“Well, it was five, six years ago. It was cheap in today's world. I'll tell you that. But on the other hand I felt expensive at that time, given a thousand customers in an A round of ten million.”
Brenner: Great fundraising is the single top trait of successful founders
“So, so I think greater fundraising is absolutely the number one trait of great founders.”
Brenner: Creandum does not engineer lower valuations in follow-on rounds
“Honest answer. We never think about that. I mean, if the market tells us this is the valuation, this is the round, we try to participate in the winners. That's honest, Harry. If that ever would come through and be true, we would not be in business.”
Hecker: Trade Republic grew users and assets while Robinhood lost users in 2022
“So they are churning monthly active users, they're churning assets, they're churning activity. At the same time, TraderPublic has growing active numbers of customers, has growing assets, and has new savings plans. And by the way, nobody is quitting their savin…”
Hecker: Traditional European banks are Trade Republic's primary competition
“Our competitors are much more the traditional banks in continental Europe.”
Hecker: Trade Republic board meetings focus on problems, not successes
“Whenever we see something not working, that's the first thing we share with people, right? So we rarely talk about the things which work well. We most often talk about the things which don't work well.”
Brenner: Founders should limit board meetings to two or three decision points
“The key points are to decide on what are the two or three points I want out of this meeting. And make pre-reads around that comprehensive so that when the board starts, you have enough information provided to everybody that you can actually have a fruitful dis…”
Brenner: Most startup boards prioritize investor seat retention over company interests
“Over time boards are mostly, you know, formed by investors and not maybe what's best for the long term. A benefit of the company and very seldom, there are some companies that do it well, but have yearly evaluations of boards and with contributions and how it …”
Brenner: Pleo has the best board due to diversity and annual evaluations
“I think Cleo is the one, and because they do actually that. It's a very diverse board. We have independent board members, not only investor board members, and we evaluate each other every year on what's, on the competences and what the lack of competences that…”
Brenner: Startups should establish a formal board after raising $10M–$20M
“In Trade Republic's situation, you needed a board from day one because we regulated the company and make sure that we adhere to those regulations. But I think when you've raised that, when you've raised 10 to fifteen million or twenty million or passed your A …”
Hecker: Trade Republic banned the term 'micromanagement' in favor of 'hands-on'
“We killed the word micromanagement in the company, right? It's not allowed anymore. We call it hands-on, right?”
Brenner: VCs have a duty to provide founder secondary liquidity
“But I think what investors can really do is be proactive in this matter and making sure that there is an opportunity for founders at some point to get some exit and liquidity and in order to be able to swing the whole way. And I think that's something that we …”
Hecker: Influencers and ambassadors are now a top customer acquisition channel
“So this is something we underestimated. You thought those chaps are incredibly expensive and why would you give them so much money? And now it's a bunch of ambassadors who really drive your authenticity and are your biggest connection pieces to the audience, t…”
Brenner: Creandum passed on Qonto due to perceived overlap with Tide
“And Konto is, is one thinking it was too, too much overlap with Tide.”
Hecker: German law forbids insurance companies from investing in venture capital
“Take Germany, right, where insurances are forbidden by law to invest in venture and all this stuff.”
Hecker: Berlin lacks experienced scale-ready engineers for distributed systems
“If we really want to hire an engineer here in Berlin, who has seen large distributed IT systems for millions of customers, we don't find them here in Berlin. We need to go to the UK. We need to go to Sweden to maybe Russia to hire these people.”
Hecker: European tech ecosystem has fallen behind the US and China
“I mean, we pride ourselves that Europe has grown a lot, but still relatively speaking has lost a track with America and China.”
Brenner: European unicorns now emerge from 65 cities versus three a decade ago
“We're seeing all these new companies coming out, we're seeing new unicorns, they're coming from 65 cities, you know, 10 years ago, they came from three cities coming all over Europe, much bigger market, remote working, can put teams together that we couldn't s…”
Brenner: European regulatory intervention by CMA stifles innovation and competition
“Too much regulations could just gonna stiffer innovation. And what we've seen here, where they just extrapolate them, making up their own opinions with CMA and in firms of Figma maybe competing in the future. I think it's totally wrong and it was stiff for com…”
Hecker: Trade Republic evaluates staff quarterly and exits non-performers
“By now I think we own our culture, which is very performance driven. Which if you don't accelerate, if you don't push you out we evaluate you quarterly. So we don't want to be this all everybody's happy a place. We want to be a place where those people who wan…”
Hecker: Trade Republic treats employee probation as an extended interview process
“Given the labor laws in Europe, we treat the probation period as an extensive form of interviews. So you're going to be evaluated all the time. At the end of your probation period, there's a committee. To really, that you can stay.”
Brenner: Trade Republic will hit €1B revenue and go public within 5 years
“TraderPublic is the complete financial partner to millions of Europeans. It has more than ten million customers, a hundred billion in assets, and a billion or more in revenues. It's publicly traded, and it's not only savings platform, but also the banking part…”