The must-watch fintech, which has succeeded in being selected by two of the country’s leading acceleration programs: Fit 4 Start and Catapult: Kickstarter will soon set up shop in Luxembourg. Divizend’s co-founders Thomas Rappold and Julian Nalenz give us an overview of what they have developed with their team and share with us their ambitions and expectations for the future.
What is Divizend about?
Divizend’s platform helps private and professional investors like asset managers, private banks, family offices and foundations to reclaim their taxes by automating the refund process of foreign withholding tax on dividends in a novel, user-friendly and price-competitive way. With our holistic approach verbalized by the claim “Find, Act, Maximize”, Divizend‘s platform will be the central place for investors striving for high dividend earnings. Additionally, we are building an open wealth ecosystem with our own marketplace, securities API and database.
How did you come up with the idea?
We think that the best startup ideas arise from realizing which pains we face ourselves: As all our team members own foreign stocks, we were frustrated about the process of filing withholding tax refund claims due to many technical, legal and tax-related hurdles. Now, we have brought together the prerequisites for building a platform for that, namely our thorough experience with banking APIs, international taxation, securities, software development and with our CEO being a co-founder of Numbrs. After all, the reclaim market is massive, with a volume of $100 billion and growing steadily by 10% every year.
What do you expect from the Fit 4 Start program?
So far, we built our platform primarily for B2C users (private investors), but now we want to scale up by expanding our scope to B2B users as well. Many new challenges arise from this, such as in business modeling, UI/UX design, marketing, pricing and strategy. With the strong industry focus and the possibility to engage in PoCs during Fit 4 Start and the generous funding opportunity to set up a legal entity in Luxembourg, the program is the perfect starting point for accelerating our Luxembourg market entry and setup of our B2B business.
And the Kickstarter one?
The LHoFT’s Catapult: Kickstarter program was an excellent four-week program with great insights and outstanding mentorship to rapidly establish connections with many important Luxembourg-based stakeholders. In sessions with experts from the legal, political, sales and financial side, we got a 360° overview of the Luxembourg ecosystem. The program’s organizers, especially Nasir Zubairi, Fred Weimerskirch and Alex Panican, did an excellent job in setting up world class workshops and connecting us to industry partners. These connections already resulted in concrete, fruitful discussions on business opportunities and the next steps for PoCs.
Why do you think Luxembourg is an ideal place to develop Divizend?
Luxembourg is one of the world’s leading asset management hubs and forms the world’s third-largest markets for withholding tax reclaims, after the US and the UK. Currently, at least $1 billion of withholding taxes stay unreclaimed in Luxembourg every year! The country brings together not only banks, asset managers, family offices etc., but also the expert tax knowledge of tax advisory firms and the Big 4. Further tailwinds come from Luxembourg’s progressive and innovative Open Banking and API regulations.
What’s next?
The logical consequence for us is to set up a Luxembourgish company for our B2B and asset management business. With this, we show a clear commitment to become part of the country’s financial community. Furthermore, we will establish an office and plan to hire local tax, fund and sales experts.