Deutsche
WertpapierService Bank (dwpbank) completed its purchase of Berlin-based fintech
lemon.markets on September 30 after receiving clearance from Germany’s
financial regulator, the companies said today (Wednesday)
dwpbank Closes lemon.markets Acquisition
The
transaction adds a digital brokerage platform to dwpbank’s traditional custody
services, allowing the combined entity to serve clients ranging from
established financial institutions to newer fintech players. dwpbank oversees
€2.2 trillion in assets under custody and processes securities transactions for
roughly two-thirds of German banks.
lemon.markets
operates an API-based platform that financial companies use to offer stock and
ETF trading to their customers. The Berlin firm holds a BaFin investment
license and counts fintechs including
Pleo, Holvi, Optio and Tomorrow among its clients.
Both
companies will keep their names and go-to-market operations separate while
coordinating on technology development. dwpbank’s existing WP3 platform handles
complex custody requirements across multiple asset classes and trading venues,
while lemon.markets focuses on streamlined services like fractional share
trading and automated workflows.
“There
is no such thing as a ‘typical’ securities customer, today’s investor landscape
is highly heterogeneous,” said Kristina Lindenbaum, executive board member
at dwpbank responsible for client and digital transformation. “It ranges
from first-time investors who prefer a reduced scope of services to
institutional investors with demanding requirements for their custody and
investing experience.”
The
approach mirrors a broader industry shift as traditional custodians attempt to
capture business from digital-first competitors that have gained ground with
younger investors and cost-conscious users. Neo-brokers have pressured
established players on pricing while introducing features like real-time
settlement that legacy systems struggle to match.
Technology Push Meets
Regulatory Needs
dwpbank
manages 5.3 million securities accounts and processed 53 million transactions
last year. The bank’s clients include cooperative banks, private banks and
savings institutions across Germany’s three-pillar banking system.
lemon.markets
raised
€28 million since its 2020 founding, including a €12 million round last
year led by CommerzVentures. The company received its investment firm license
from BaFin in 2023, authorizing it to handle activities from contract broking
to portfolio management.
Max Linden,
founder and CEO of lemon.markets,
said the company would maintain its pan-European focus. “Our focus remains
on providing the leading Brokerage-as-a-Service platform for banks, asset
managers and FinTechs,” Linden said. “Together with dwpbank, we are
actively shaping the securities market.”
The move
comes after the fintech last year partnered with major banks BNP Paribas and
Deutsche Bank to
launch its Brokerage-as-a-Service product.
The dwpbank
group now consists of the parent bank plus three subsidiaries: lemon.markets,
dwp Service GmbH, and dwp Software Kft. dwpbank is classified as a systemically
important institution under German banking regulations.
This article was written by Damian Chmiel at www.financemagnates.com.
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