27 October 2022. Jan-Philip Schade comes from Kiel, the harbour town on the German Baltic coast, and is saving for a yacht. Schade opens the app of his start-up Kaspar& and reveals the corresponding investment custody account entitled "Yacht". It only holds a few hundred Swiss francs, "but it's a long-term savings target."

Kaspar& users can set monthly payments for such savings targets - but one function in particular sets the start-up offer apart from classic savings accounts: when paying with the Kaspar& bank card, the digital change to the next franc is automatically invested in an investment portfolio. "Many people take their small change out of their wallets in the evening and put it in a jar. We have a similar approach, ours is simply digital," Schade explained. For example, if you pay CHF 4.50 for a coffee with the Kaspar& card, 50 cents are automatically invested. Users can also choose between different savings accounts, depending on whether their investment strategy is geared more towards security or risk.

Promotion in the HSG start-up programme

Kaspar& is a new entry in the fiercely contested market for so-called neo- or smartphone banks. Founded by the three HSG graduates Schade, Lukas Plachel and Sebastian Büchler as well as the UZH mathematician Lauro Böni in August 2020, the company launched its app in March 2022. Registration and account opening occur via the app, but the account is held and maintained via the Hypothekarbank Lenzburg.

The ten-strong Kaspar& team has offices in Zurich and in the St.Gallen innovation centre and network "Startfeld", which the HSG also supports. "You're encouraged to be a founder at the HSG and your own ideas are promoted," said Schade, who got his doctorate at the HSG at the Swiss Institute of Banking and Finance (s/bf-HSG). Kaspar& also participated in the "Entrepreneurial Talents programme" at the HSG, in which founders are coached and also supported financially. Today, Kaspar& bears the official spin-off label of the HSG and of the ETH Zurich.

Appearance on the "Höhle der Löwen" ["Lions' Den" - Swiss version of the Dragons' Den franchise]

After completing his doctorate, Schade worked in asset management for several years, as did his co-founders. "We noticed that their offers were predominantly directed at the well-off." One consequence of this was that about 75 per cent of the Swiss did not invest their money. "Many have the idea that investing is complicated or are afraid of making losses," Schade noted. This is why Kaspar& firstly wanted to simplify investing and secondly make it possible to get started with one franc of seed capital and take the initial steps in a secure area. "What makes our solution unique is undoubtedly that we've combined investing with the everyday process of paying," Schade said. This eliminated the administrative effort that was otherwise often associated with financial investments.

At the beginning of October, the four-member founder team made its appearance in the Swiss version of the start-up TV programme "The Lions' Den". Several of the "lions" found the idea appealing, but in the end were unable to invest due to conflicts of interest. "But we were able to present our idea to a wide audience," Schade concluded. During the programme, the founders communicated their aim of acquiring 20,000 customers within three years. "I can't reveal current figures, but we're on course," Schade said. The business model included customers paying an all-in annual fee of 0.85 per cent on their investment custody account.

"Want to become the Twint for investing"

Moreover, financing rounds totalling CHF 2.1 million to date have provided the wind needed in the Kaspar& sails. The start-up has local and Swiss-side support; among others, the investors include the St.Gallen 41 Group or since July 2022, the Baselländische Kantonalbank (BLKB).

According to Schade, it is conceivable that the BLKB will make part of the Kaspar& solution accessible to its own customers. He told the "St.Galler Tagblatt" that they are in talks with other banks and want to become "the Twint for investing" - i.e. be embedded in what a number of different banks are offering. "As a start-up with a ten-person team, we're more agile than big banks and can therefore offer them individual solutions," said Schade. All of the company's programmers work in Switzerland, meaning communication channels are short and innovations can happen in a short period of time. Either way, they intention is to keep expanding the app, for example, with 3a savings plans, integrated insurance and a donation function.

Like all asset managers, Kaspar& has also felt the current strained economic environment. "You can tell that people are a little more cautious about investing," he conceded. "We want to make it clear to our customers that they should adopt a long-term perspective when it comes to investing." Consequently, since their market launch, Kaspar& had also been making explanatory YouTube videos and webinars about investing publicly available. "In general, we think that far more people should understand investment-related processes," Schade added.

Photo: Kaspar&