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Sustainable Investing | since 1999 | OnVista

OnVista — Making it Public, During the Crash

The onvista Group is Germany’s online pioneer and leading platform for financial news and information. Founded as the first of its kind in 1998, by Stephan Schubert, Michael W. Schwetje & Fritz Oidtmann (today Managing Partner at Acton Capital), onvista announced its IPO just prior to the peak of the Dotcom crisis, with onvista shares 80x oversubscribed. Until its exit, the startup has burned no more than €4 million in cash.

About the startup challenges of an early digital pioneer in Germany, and a business model that may have paved the way for fintech innovations two decades later:

Onvista founders Stephan Schubert, Michael W. Schwetje, Fritz Oidtmann (1999)

To buy or not to buy? To make the right decision, traders need independent financial information. Yet accessing such data used to be quite a challenge. That is until 1998, when OnVista.de went online — and public shortly after.

The Internet stores, communicates, and computes a vast array of information. In 2015 researchers estimated that it would take two percent of the Amazon rainforest to have enough paper to print out the entire web including the Dark Web — excluding the massive amounts of non-text data hosted online. In today’s world of information overload, the important challenge is quantifying and visualizing accessibility to virtual information spaces. In the mid-1990s the challenge was much more clear-cut: making information available.

Terms like Big Data and FinTech basically didn’t exist in the 90s. Specific data — and financial information in particular — was neither accessible nor available online. The Internet was a free-fire zone, and so was day trading. “You could basically trade warrants online anywhere”, Fritz Oidtmann, co-founder of OnVista and today Managing Partner of Acton Capital, remembers. “Even though online banking already existed, there was no information available for those who sought to speculate with warrants.” What applies to horse racing can also be applied to day trading: a lack of solid information can lead to total loss.

“Even though online banking already existed, there was no information available for those who sought to speculate with warrants.”

Back in 1998, about 7,000 warrants were on the market and day traders had three options for access to crucial information: first, looking up current prices and key performance indicators (KPIs) in by-monthly magazines, unavoidably accepting that the information was already outdated by the time the paper left the printing press. Option No 2: logging-on to the very expensive Reuters terminal, provided that your internet connection met the requirements for download. Or the third option: creating your own spreadsheet with KPIs based upon the prices you could find on Teletext. That basically meant sitting in front of the TV for hours, trawling through and documenting Teletext pages for 7,000 different warrants. “It was frustrating, especially because time was of the essence,” Fritz explains. “And it was complex. You had to have up to three devices running, making noise, taking up space, and heating up your office: your TV, a huge PC under your desk, and a terminal. They just thought, why not make things easier?”

When Fritz says “they”, he’s referring to Stephan Schubert and Michael W. Schwetje. The two former WHU students had promised each other to “meet again and found a company”. While two’s company, three is a successful company, at least in the start-up world — and the duo felt they needed someone to prevent them from coming to a standstill in case they failed to agree on their next move. In search of “an honest and trustworthy sparring partner”, they approached a former colleague of Schubert and Partner at McKinsey & Company: Fritz Oidtmann.

“You had to have up to three devices running, making noise, taking up space, and heating up your office.”

Their initial business idea of selling neckties online failed to tie up the loose ends. However, when they presented their new idea, it made perfect sense and seemed doable: gathering financial information in order to make it available online, accessible to everybody. Fritz quickly understood that “there is a benefit, there is a value — which means we can definitely create a demand, and there’s a market.” Together, the founders systematically processed all warrants data, automatically calculated their key figures and provided them to users via a website for a subscription fee of DM29 — around €15 — per month.

That moment in 1998 marked the birth of an independent financial information portal specialized in analyzing warrants: OnVista. Or rather onvista.de. While using a country-code in every communication of a company may be obsolete today, in the late 1990s it felt crucial to differentiate between traditional and so-called dotcoms. “Some of my partners at McKinsey still had their emails printed out,” Fritz laughs. “Yet during our notary appointment, we realized how uncharted the online territory really was. The notary kept pushing us to rethink the name and we repeatedly had to explain why we wanted to register our brand as onvista.de. But from then on everything went furiously fast.”

“Some of my partners at McKinsey still had their emails printed out.”

The very day after the site went online in September 1998, it logged its first subscribers. “We were surprised ourselves,” Fritz remembers. “How could they have known about us? Then again, there were forums and discussion boards where stock jobbers were swapping information. But marketing was not the most expensive factor, hardware was.” At that time, there was no direct connection to a powerful internet network. Therefore, COLT Telecom needed to install cables from its node in Cologne to the OnVista office. “As I passed the construction site in the morning and saw these workers installing the cables, I felt proud for the first time and realized that what we are doing here really affects the whole economy.”

Impressed by the excellent structure the data was presented in, banks grew interested in advertising on OnVista.de. Business news sites inquired if they could include the information on their site. “We had no idea about pricing. What were we going to charge for deploying and licensing information? There were no references and due to the currency conversion phase within Europe at the time, the market offered an additional opportunity. There was a period when, on talking to banks, we first named a price, and if they kept calm and didn’t seem fazed, we added euro as the currency instead of Deutsche Mark.” Two months after its launch, OnVista finally abandoned its original subscription model in favor of paid advertising and licensing. A few months later the company was cash-flow positive. Potential investors from all over Germany came knocking at the doors. Eventually, OnVista partnered with an investment team from Munich: “I remember sitting behind Burda board member Paul-Bernhard Kallen during a flight and noticed that he was constantly reading the stock exchange section of FAZ,” Fritz explains. “Since I never really understood how one can look at dry facts such as market rates for that long, I thought: He’s sure to be interested in OnVista.” And as though it was meant to be, he was.

“We had no idea about pricing. What were we going to charge for deploying and licensing information?”

Meanwhile, people in Germany had become increasingly interested in the stock market after the Telekom IPO in 1996. The company had spent DM 100 million marketing their “people’s share” as the “safest way to invest”. That originated an unseen trading hype, and OnVista was right there to assist people in making informed choices. Page impressions skyrocketed and Fritz, Stephan, and Michael got ready for their next move: as an initial step towards an IPO, the German OnVista GmbH was transformed into a stock company in 1999. “We had 40 employees at that time,” Fritz recalls. “We asked all of them, the banks, the lawyers, the accountants: can we make it happen by the end of February? Everyone said yes.” 21 months after its formation and 17 months after the site’s launch, the whole start-up team traveled to the Frankfurt Stock Exchange to witness OnVista go public.

The issuance of OnVista shares was 80 times oversubscribed. “Yet it wasn’t so much the money we were after,” co-founder Fritz notes, “but the attention.” Mission accomplished: Handelsblatt described OnVista as ‘Bloomberg for private investors’ — and by the beginning of 2000, the site had twelve million monthly visitors; by the end of the year, the company had increased its total revenue sevenfold, setting the pace for years to come. In January 2001, the portal saw 80 million page impressions, an annual plus of 500%. The startup began its international expansion and by the end of 2006, distributed a seven-figure dividend. One year later, French online broker Boursorama, a subsidiary of Société Générale, acquired OnVista. Boursorama priced the share more than one third above the quotation, valuating the company at €138 million. Since 2017, the OnVista Group and its subsidiaries are part of the German Comdirect Bank AG. It is worth mentioning that from OnVista’s establishment until its exit, the startup pioneer has burned no more than €4 million in cash.

Today, OnVista remains the leading portal for independent financial information in Germany and is an impressive example of how providing necessary information can not only be turned into an IPO, but also into a nine-digit success story.

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Bettina Engert

Bettina Engert

Shaped @FlixBus’ story from startup to corporate in Europe/US. Writing about entrepreneurship and tech-enabled business models, ready to scale & built to last.

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