Kontist: Banking for Freelancers & Self-Employed


This week, Olena Gryniuk talked to Sibylle Strack, CEO at Kontist, on approaching freelancers and self-employed customers.

Olena Gryniuk: I love your slogan: “Do your thing, not your taxes.” A very right one for the self-employed entrepreneurs, for which time is literally money. To transform this slogan into reality, you connected bank account with the other services to manage financials, like e-invoicing tool, bookkeeping, tax calculator, cash management tools. Please tell us in detail how exactly this works for your customers?

Sibylle Strack: German freelancers spend, on average, 25 days and around €3.000 a year managing their finances – mostly for bookkeeping and tax accounting. At the same time, because of the complexity of the process, they lack an overview of their finances and are constantly exposed to the risk of liquidity bottlenecks.

Kontist’s offering has been tailored to their unique needs by integrating all parts of their financial requirements and combining the classic business bank account with accounting and tax automation functions, making Kontist a new category in financial services. For example, expected income and sales tax amounts are calculated and forecast dynamically in real-time, and automatically set aside in virtual reserve accounts. As a result, the freelancer is aware of his real net income available to him to cover his business expenditure. In a single, intuitive service, Kontist provides a single point of truth and thus gives the freelancer more security and control over his financial wellbeing. This, of course, is especially important in the current situation, when it is critical for self-employed workers to stay on top of their liquidity.

In the future, we will continue to expand our offering around the automation of taxes. In three years’ time, we no longer want to be perceived as a banking provider, but as a problem solver for freelancers and the self-employed. Then, banking will only make up 15 to 20 percent of our offering and our business.

OG: Which services are free of charge, and for which of them a customer should pay?

SS: Our “Free” bank account is and will remain free of charge. It is a fully-fledged German business bank account with unlimited transactions, real-time notifications, and a virtual debit card. Our “Premium” customers pay for the features that go beyond traditional banking, and which reduces the time they spend on managing their finances significantly by making the paper chase a thing of the past! They include bookkeeping integrations, tax forecasts, the building of tax reserves in virtual sub-accounts, automatic adjustments of tax prepayments, as well as a physical Kontist business debit card. With this full-service, we come much closer to reducing the amount of time freelancers spend on managing their finances. In the future, we aim at automating the services even further – up to full automatic tax declarations.

OG: How big is your customer base? What are the targets for the nearest future?

SS: A counter-question: what would be a good number, and what would be the wrong number? What matters to us is providing a good service to customers that keeps them happy. Kontist is a specialist provider targeting an attractive but particular audience. Our goal is sustainable growth and a sustainable business model, and the basis of that is customer retention. Of course, we do have aspirational growth targets, which we exceeded in 2019, and also in 2020, our strong growth has continued throughout the corona crisis. But it is more important to achieve sustainable growth.

OG: Do you cover only the German market? Do you plan to target other markets in the nearest future?

SS: We see much potential for our offering in other markets. But in the near future, we believe there is still enough for us to do in Germany.

OG: You also have Kontist Foundation for Citizen Entrepreneurship to support freelancers and self-employed entrepreneurs. Can you say more about that? What exactly do you do here?

SS: Although Kontist’s banking offering far exceeds usual SME banking, we still wanted to go further. In our experience, the needs and worries of the self-employed in Germany go far beyond financial needs. Germany’s structures and processes are geared towards the salaried employee: parental leave, parental allowance, health, and pension insurances. There are hundreds of things, where the self-employed are at a disadvantage compared to employees. Long-term, we want to change the framework and the culture of self-employment in Germany. To this end, we do political lobby work with the foundation.

At the same time, the foundation provides mentorship, conferences, and education directly to the self-employed. Over the last two months, it has become obvious how great the need for tailored support is for the self-employed. During the corona crisis, the foundation has held daily free webinars with legal and business experts that evaluated political and economic developments and their impact on the self-employed. The resonance exceeded our expectations, with up to 2.000 participants per episode. 

OG: How many people work in Kontist? Is all the staff based in Berlin?

SS: The team consists of more than 75 employees from over 30 nationalities, most of whom have many years of freelance experience and who developed the product together. The majority of them are based in Berlin. But now that remote work is not just optional anymore but the “new normal,” and we have seen how well the team performs on a project and output-oriented basis, this might change. Considering making remote working a more fixed component of how Kontist operates, we might expect to see our team dispersed across more locations.