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Divizend helps users reclaim actual money from foreign authorities and thus optimize their dividend return in a highly convenient way

How was the idea behind your startup born? Present your team and let our readers know how you all came together.

In the past, we have seen that withholding tax is a major pain point for many investors, which is frequently reported about in newspapers, magazines, finance portals and other media. Furthermore, we have gotten feedback from a large number of private investors that they are looking forward to our platform to make this process much easier. Consequently, Divizend relies on strategic, strong and sustainable B2B2C partnerships with players that have a direct connection to future customers of ours, which results in low or zero customer acquisition costs.

The Divizend team met mid-2019 over the span of several months via university projects, software development activities, meetups etc. Our team now consists of the following members:

  • Thomas Rappold (CEO): 20 years FinTech experience (Allianz, Credit Suisse), co-founder Numbrs, WealthTech, bestselling author, TV/newspapers
  • Julian Nalenz (CTO): software architect, Munich start-ups, GitHub contributor, Machine Learning experience
  • Simon Scholz: design/mockups, co-founder CDF, pitchtable.io
  • Jonas Tamimi: banking APIs, Kubernetes, Docker
  • Christian Schlienkamp: founder c|s software & design, FOSS graph databases (Neo4j)
  • Justin Meszaros: stock market and international taxing expert
Thomas Rappold – Co-Founder and CEO

Can you please present your solution? What makes your solution stand out from the rest? 

Foreign dividends are normally taxed twice, with both foreign withholding tax and domestic income tax. The former can be refunded, yet filing withholding tax refund claims requires familiarizing with many technical, legal and tax-related issues, which is mostly too time-consuming and complicated.

With our platform, we are democratizing this process and allow users to reclaim actual money from the foreign authorities and thus optimize their dividend return in a highly convenient way. According to our claim “Find. Act. Maximize.”, we will eventually holistically revolutionize the trillion-dollar dividend market. 

Which Data Provider do you collaborate with and how has your experience been? What made you choose them and their challenge? 

For the free track of EDI, we had three data providers instead of just one:

Firstly, Deutsche Bank, one of Germany’s leading retail and private banks, which has a strong customer footprint with securities and stocks. Deutsche Bank offers dbAPI, a great overall Open Banking API with extensive securities API services and a vibrant Open Banking community. According to our experience, the team was incredibly responsive, bugs in the API were fixed quickly if we identified some, they helped us further develop our business model and they supported us in international taxation.

Next, we worked together with finAPI, the most reliable banking API in Germany and Austria, with broad coverage of all relevant banks from Germany, Austria and parts of Eastern Europe. finAPI also had great and very responsive technical support.

Lastly, we had ndgit, which, just like us, is also a member of the Swiss OpenWealth Association, and is creating a unified Wealth API. We closely collaborated with ndgit’s development team, especially regarding the highly relevant asset management markets of Switzerland, Luxembourg and Hong Kong.

You have come a long way since the start of the EDI incubation programme. Can you tell us more about the evolution/traction of your solution, company and team during the programme? 

EDI was a great catalyst for the development of Divizend. We started with a rough business idea and created our business model and first mock-ups in the first phase of EDI. In the next few months, more and more prestigious competitions and hackathons followed, and we became members of great organizations and other government-funded projects. Even investors approached us and told us that getting this far in EDI is an outstanding achievement, which will surely help us in getting large investments in the future.  During EDI, we finished building our platform based on a refined, advanced business model and are now creating first revenue with beta customers.

What challenges did you face and what lessons did you learn? 

The field we operate in has repeatedly shown to be very complex, as a lot of special knowledge needs to come together, for example in the areas of taxation, securities, and in cooperations with large financial institutions. Working together with international tax authorities is also challenging and time-consuming. Additionally, our business is inherently international and many country-specific details and regulations need to be worked into our platform, so creating an abstracted platform for that was challenging, but eventually, we achieved highly promising results.

What impact has your solution achieved/ you are planning for it to achieve?

In times of zero interest rates, investments, especially into dividend stocks, continue to be a great way to achieve sustainable income, yet the double taxation of great foreign dividend stocks continues to be a big problem, as investors lose actual money because of that. The global dividend amount was $1.4 trillion in 2019, $100 billion of which are withheld and $18 billion stay unclaimed, mostly by private investors. We see incredibly high demand from private and institutional investors for our solution, as they just want refund applications to be much easier than they currently are. One of our major general achievements is definitely that we have been accepted as a reliable partner by the international FinTech community, shown by our existing and steadily developing partnerships with leading players in the financial industry.

According to your experience, what is the secret behind a successful data driven startup? 

We became successful by establishing a clear business and IT strategy, which were greatly aligned with each other, and where all respective members of the team always knew what was going on in the company, leading to consistently high motivation. Regarding data, we believe that our clear focus on the most important and most relevant data providers for great data quality, data depth and APIs for convenient, automated access were an important factor in our success. On the database side, we went for modern, advanced, future-proof, but also proven and quasi-standard NoSQL and graph databases instead of legacy relational databases, and our selection has turned out to be highly suitable for our purposes. During business operations, we now continue to focus on optimizing data quality, which is achieved by data curation, both manually in a first step, and then quickly automated.

What’s next for you? Are you looking for partnerships, a new round of investment, new piloting or something else? 

At Divizend, we are always looking for new international partnerships, especially with new data and banking API providers and new potential customers like financial institutions (banks, asset managers), family offices and tax software providers. Next up on our agenda is the REACH Incubator, to which we have successfully applied with a brand new, revolutionary idea of ours to continue building value-added services for investors. At the same time, we are currently looking for a series A investment of $2 – 5 million to accelerate our international expansion. Regarding piloting, we are continuously creating new PoCs for US and Southeast Asian markets and are really interested in getting in touch with respective test users.

How would you describe your experience with EDI?  

Working together with the EDI team and its mentors has been an incredible experience. Not only did we get amazing insights into interesting entrepreneurship-related topics in the EDI webinars, but also through the mentorship, we developed great connections, especially to the Spanish and Catalonian market with its banks and top-tier companies. Most importantly though, we really appreciated the special, vibrant EDI atmosphere, created by the amazing teams from University of Deusto and Etventure.


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