The start-up Verimi started out with high hopes. When the identity and data platform launched in 2018, the then boss Donata Hopfen was quoted as saying: “The launch of the platform is an important milestone in the history of Verimi and for the digital economy in Europe.” Finally, the shareholders hoped at the time, there would be a European alternative to a universal login (single sign-on) from Google or Facebook. These allow users to log into many different websites by simply linking their online account to them, giving US companies an incredible treasure trove of data. Verimi should now be the European answer to this. One log-in for many websites, legally compliant, secure – and supported by well-known companies. In addition to Bundesdruckerei, Deutsche Bank, Allianz, Axel Springer and Deutsche Telekom were also there.
Five years later, there is as little left of great hope as of the original business model. The “green Verimi button” can hardly be found on any website, major success reports have been missing for a long time, hardly anyone in the general population knows the name of the company despite major partners from Mercedes to Samsung to DZ-Bank – and the start-up seems to be still looking for a brilliant business idea. The plan for universal log-in didn’t work. Presumably also because many consumers seem to have long since gotten used to providers such as “Facebook Connect”, “Login with Google” or “Sign-in with Apple”.
In 2019, there was a shift towards “digital identities”, which you need, for example, to open a bank account or identify yourself online. Since then, new applications have continued to be added. Today, for example, Verimi offers you to identify yourself, log in, sign and pay online. For example, if you want to take out insurance from Allianz or a contract with Telekom. The List of applications but is still quite manageable.
The desperate search for a business model for the start-up with celebrity shareholders is reflected in research by South German newspaper also in the most current figures that are publicly available. According to the 2021 annual report, the company’s loss has now totaled almost 100 million euros. By 2020, the company had already accumulated a loss carryforward of almost 80 million euros, which added an annual deficit of 16 million euros for 2021. The start-up spent more than seven million euros on its staff.
On the other hand, hardly any money comes in from the core business. When customers identify themselves with a business partner in order to identify themselves online, Verimi receives a fee from them. The commissions that Verimi’s 70 employees earned with these identity services amounted to a manageable 147,000 euros in 2021. A year earlier it was only 50,000 euros. Has that changed in 2022? It would be surprising, to say the least. Verimi does not specifically answer questions about the numbers from 2022 and 2023. But there is still no shortage of big plans: “Continuous growth is planned for the coming years,” says a spokesman.
German companies only became active when it was already too late
Verimi is another example of how Europe’s companies are lagging behind in the fight for market share in digital projects. The Paydirekt payment system was also supposed to assert itself against Paypal as an online payment service for German banks and savings banks, but only when everything was actually too late. While the US companies led the way and diligently collected market share, the German banks initially ignored the issue of payment transactions and were then unable to agree on a common procedure. Meanwhile are three existing services technically merged and have been advertised under the Giropay brand since summer 2022. However, compared to Paypal, they lead a niche existence.
Verimi, on the other hand, attracted more public attention with negative reports. This is what hackers recently showed in August 2022 weaknesses the app. There was also trouble with Bafin over the question of whether employees had deceived the financial regulator at the Verimi Pay payment service. The start-up’s chairman of the supervisory board, Stefan Imme from Volkswagen Financial Services, saw it accordingly compelled to make it clear publicly: “The shareholders fully support Verimi.” It’s like with football coaches: the fact that a supervisory board has to emphasize something like that doesn’t exactly mean that this solidarity is a given. When asked, it is now said that the shareholders are behind Verimi.
Numerous conflicting goals
The problems may also be due to the fact that the shareholders did not agree for a long time about how much responsibility and freedom they wanted to give the Verimi management. At least that can be seen from a previously unknown job description for the position of “Spokesperson of the Board”, i.e. the CEO, which the SZ was able to see. The job advertisement is from 2018. At that time, CEO Donata Hopfen had just quit. Now a new boss was needed, one who would make the flagship project into one.
The headhunters noted: “The applicant must have the ability to think as a visionary and strategist and act as a results-oriented manager.” A page later they state that he or she should have experience managing a “complex and demanding” group of shareholders. Visionary thinking on the one hand, entertaining shareholders on the other and still making money somewhere? That sounds like a lot of conflicting goals. These sentences also reveal how difficult it will be to reconcile the interests of the many different partners, from banks to automobile customers to aviation companies, something that former Miles&More managing director Roland Adrian has had to manage since then. He had replaced T-Systems manager Jeannette von Ratibor, who in turn had stepped in on an interim basis for former Springer manager Hopfen. “Little tree, change yourself” in Manager Germany.
Deutsche Bank, Allianz, VW Financial Services and Samsung invested another ten million euros in 2021 and wanted to take the lead among the shareholders. In autumn 2022, Verimi even merged with Yes, the identity service of the Volksbanks and Sparkassen. However, what initially looked like a sensible pooling of forces has so far failed to bring about a breakthrough. The Volks- und Raiffeisenbanken are significantly increasing their share in the merged service provider; the now merged infrastructure of Verimi and Yes will already handle well over ten million in 2022 transactions, it was announced. Shortly afterwards, however, several people left Savings banks are already at a distance again, removed the Yes function from their offering, citing data protection concerns. The pooling of forces initially dissolved again. Verimi, as it was said at the time, should be given the chance to restart. Little of it can be seen so far.