The German BaaS provider Dock Financial filed for insolvency last week. Unlike its US counterpart Synapse (read further down), there is not much drama or public information available - at least for now. What we know is, that two of the German entities of Dock Financial have filed for insolvency, but apparently not the regulated entity in Luxembourg. It seems that the company intends to continue its operation and remains on the search for a strong investor.
The history of Dock Financial is not the one of a normal startup, in fact it is not even a startup. Crosscard, that’s how the company was called until 2022, was founded in 2006 as a spinoff from PPRO and was sold in 2019 to its investors. At that time, the company was offering white-label issuing products, including some of their own brands. In 2021, no other than Marco Wenthin, Solaris co-founder and its first CEO, joined with other allies to turn the traditional company into an banking-as-a-service high flyer.
The rebranding announcement in 2022 was basically the starting point in their banking-as-a-service journey where they also announced their only funding up to this date. The investor was Claret Capital Partners, which happens to be one of the PPRO investors. Since then, Dock had only two bigger announcements, both of them were acquisitions. In early 2023, Dock acquired SME lending comparison platform Compeon after making a minor investment the year before. And in October 2023, Dock announced an ‘acquihire’ of Paydora, a banking frontend provider. Dock was betting that both services will complement the core banking-as-a-service product and help close additional deals. But was that the case? Dock’s website includes logos from Booking.com and other mobility and travel companies. But it remains unclear which products the company has actually powered and how big their reach really was.
Dock Financial was likely fundraising over the past few months but was not in a good position - unlike its direct competitor, Swan, which closed its Series B in the second half of 2023. As an outsider, its hard to judge why, but I would assume that the long history (founded in 2006) and corporate spinoff had its negative impact; especially on technology and the cap table (it seems that the management team holds less than 40% of the company).
I know a few of the team members of Dock Financial personally, and I really hope for the best for them. But the insolvency news will not help with fundraising, closing new deals, and putting signed clients live, so the challenge will be big.
