Vienna's froots raises €2.3M, adds ex-Woom CEO to backer list

What's the deal? Vienna-based wealth-tech firm froots has raised €2.25 million in an early VC round backed by new and existing investors. Backers include Andreas TreichlDealroom has a profile for this one. Try Dealroom →, the former chief executive officer of Erste GroupDealroom has a profile for this one. Try Dealroom →; Reinhold BaudischDealroom has a profile for this one. Try Dealroom →, founder of durchblicker.atDealroom has a profile for this one. Try Dealroom →; and Paul Fattinger, the former chief executive officer of Woom, who is a new investor. The company plans to use the money to expand its platform and strengthen its brand.

What does froots do? Founded in 2020, froots offers automated wealth management and manages roughly €250 million. It works with partner bank Schelhammer Capital BankDealroom has a profile for this one. Try Dealroom →, with savings plans from €75 a month and one-off investments from €1,500.

Why now? The round continues a deliberate pattern of many small raises rather than one large one. froots previously took in around €2.9 million, and €1.05 million before that from existing investors.

What's the endgame? The company is building for the long run, seeking so-called evergreen investors rather than a round with a fixed exit window. "We founded to stay," said chief executive officer and co-founder David Mayer-Heinisch (translated from German), adding that not owing anyone an exit in five years frees the firm to make 20-year decisions. That horizon fits its customers, who commit to an average contract length of 18 years.

What could go wrong? The market is crowded. German digital wealth managers including Scalable Capital, WhiteboxDealroom has a profile for this one. Try Dealroom →, GrowneyDealroom has a profile for this one. Try Dealroom →, and Oskar compete for the same savers, some with lower entry points and fees. froots' main draw is automatic capital gains tax handling for Austrians, while its all-in fee of 1.0% a year is its most common criticism — on cost it ranks third among compared Austrian providers.

The signal: The €2.25 million round is modest, sitting in the lower half of comparable deals by size. But froots is betting that patient capital and long client relationships matter more than headline funding — a wager that ultimately rests on customers trusting it with their money for decades.

Read more: trendingtopics.eu

Image credit: Generated with Gemini