Stephan Stricker is already back on duty - after his New Year's vacation, the CEO of debt collection start-up Pair Finance is planning for the coming year. At the end of 2022, private equity firm Pollen Street acquired a majority stake in the Berlin-based company for a reported €100 million, making it one of the biggest start-up exits of the past year and also a personal success for founder Stricker. In this interview, he reveals why he wanted the exit, why he opted for a private equity partner and what long-cherished dream he fulfilled after the deal.

Mr. Stricker, what have you done recently?

Over the New Year, I took a vacation with my family in Cape Town. I'm a big fan of the city and always enjoy returning. For me, it's one of the last oases in the world.

Did you celebrate the successful exit from Pair Finance there?

Not immediately celebrated. But it was the first opportunity to reflect and celebrate this success over a glass of wine with a few friends. There was no champagne party in view of the deal with Pollen Street. For one thing, that's not my style. I like to celebrate, but I don't just blow the money. And secondly, there was plenty to do even after the deal was closed - after all, I'm still CEO.

You managed one of the biggest fintech exits of the past year, Pollen Street reportedly invested 100 million euros for 60 percent of Pair Finance. You yourself have also sold shares. Isn't it tempting to fulfill a dream or two?

I have fulfilled one of them. I've always wanted to buy my own house for the family. We already had a nice apartment in Berlin, but I think it would be great for my children to grow up with their own garden.

You founded Pair Finance in 2016, having previously worked in a management consultancy and for advertising start-ups. Wasn't that a pretty big leap into the world of finance?

I took the big leap much earlier, namely from KPMG into the Berlin start-up world. Back then, I got a call from Jan Beckers, a friend from university. Jan had founded the company builder IONIQ/formerly Hitfox, with which he wanted to build start-ups. He needed support for this, which was my entry into this scene. I then mainly managed the internationalization for Applift and ComboStrike/formerly Ad2Games. Among other things, I was in San Francisco and Sao Paulo to set up national companies there.

So why did you decide to become an entrepreneur yourself?

I had been thinking about it for a while. That was also one of the reasons why I was convinced by the offer from IONIQ/formerly Hitfox. I find working in a start-up much more satisfying than in a large company like KPMG. In a start-up, you can achieve goals very quickly. Every week you take a new step. And you can exert much more influence and have much more decision-making power.

You have founded a debt collection start-up. That's a tough break after years in the advertising business.

I wouldn't say that. The technology we use at Pair Finance is similar to that used in the advertising industry. Advertising works on the basis of data points that are analyzed in order to achieve better conversion rates, i.e. more people who are motivated by the advertising to buy a product, for example. Better rates are achieved by targeting different customer groups as precisely as possible. At the end of the day, that's what we do with Pair Finance. We want the highest possible quota of claims that are also paid.

You then enlisted the support of Finleap for the start-up. Was it easy to convince the people in charge of your idea?

I developed the idea in close collaboration with Finleap. During my time in the advertising business, the fintech world was developing rapidly. Finleap wanted to be part of it, so I got in touch with Ramin Niroumand, the founder and CEO of Finleap, and started Pair Finance.

Most people tend to associate the industry with a rough-and-tumble approach.

We have around 80 criteria that we use to select the right approach for each customer. We do this with the help of a self-learning algorithm, and we also have a team of behavioral researchers in the company who come up with suitable tools. We then select the right tone of voice, for example.

Please give us an example.

For some late payers, the cooperative approach is more appropriate: "Hey, did you forget to pay your bill?" For others, we appeal to a sense of fairness: "At company X, a lot of people work hard to deliver your product, don't you think it's fair to pay?" We would select the latter, for example, if we determine from the data that the debtor plays sport, so we rely on their sporting spirit. But we also optimize many other things, such as the response time. When is the chance of success higher if we contact them in the evening or in the morning?

And that works better than the traditional approach?

We are ten to 15 percent better than the market in terms of claims settled. And we also deliver results faster.

Around six years after founding the company, you were able to convince a major investor. Was an exit always your goal?

Yes, but as an intermediate step. It was clear from the moment we decided to seek financing from venture capitalists that the exit would have to come at some point. Business angels and venture capital funds want to realize their profits at some point. Thanks to the deal with Pollen Street, they have now been able to do that with us. But I, as the founder, will remain on board. My vision for Pair Finance has not yet been fulfilled.

Why did you opt for a deal with a private equity investor instead of an IPO, for example?

On the one hand, private equity firms often operate internationally, which suits us because we also want to internationalize. And they often have the opportunity to acquire funds to finance investments. This means that fundraising is no longer an issue for us. But this is only possible because we as a company are also attractive to private equity. They are interested in growth-oriented and already profitable companies. And we were able to score points here, we are already operationally profitable.

Who has to convince whom in a deal like this, the investor the company or vice versa?

It's a give and take. The investor usually pitches, but of course we also have to present our business model and explain how we want to move forward. And that's where Pollen Street was the best fit. They understood our business model and immediately thought it through. I came to appreciate their team on a human level in particular, which is a factor that shouldn't be underestimated.

Is a different wind now blowing at Pair Finance with a new majority shareholder?

I notice that the focus is now more on the financial side. And not just superficially, they are looking very closely at our figures. But of course they trust the management, who have stayed on board. After all, it was our idea that convinced them to invest. This year we are starting with internationalization, which will be the next big task. After our start in Austria, we are now also intensifying our internationalization with Switzerland, the Netherlands and France, and in the medium term we also plan to expand into Scandinavia.

And you stay on board for the entire journey?

Yes, I still have a lot planned with Pair Finance and I want to stay as long as I can make a difference. I don't see myself as a privateer at all. As I said, I like this kind of work, the satisfaction of achieving goals. I wouldn't want to do without it and it fulfills me every day to see the added value we create with Pair Finance.

Thank you very much for the interview.

Personal details: Stephan Stricker is the founder and CEO of Pair Finance. He previously worked for several start-ups in the marketing and advertising sector. Before entering the start-up sector, he worked for the management consultancy KPMG for several years. Stricker studied business administration in Münster and Sydney.

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