Deutsche WertpapierService Bank (dwpbank) has finalized its acquisition of the fintech company lemon.markets, which is based in Berlin, as of September 30, following the approval from Germany’s financial regulatory authority. This transaction enables the integration of a digital brokerage platform into dwpbank’s traditional custody services, expanding its offerings to a diverse clientele that includes long-established institutions as well as newer fintech entrants. dwpbank currently manages assets worth €2.2 trillion and serves about two-thirds of Germany’s banking sector by overseeing securities transactions.
Lemon.markets boasts an API-driven platform that financial institutions utilize to facilitate stock and ETF trading for their clients. The Berlin-based firm is licensed by BaFin and counts among its clients several notable fintech companies. With its acquisition, dwpbank aims to enhance its service capabilities in response to the evolving needs of the market.
The two companies intend to retain their distinct identities and marketing approaches while working collaboratively on technology advancements. dwpbank’s WP3 platform is geared towards managing complex custody operations across various asset classes and trading venues, while lemon.markets focuses on simplifying procedures with services such as fractional share trading and automated workflows.
A representative from dwpbank noted the importance of recognizing the varied nature of today’s securities customers, emphasizing that there is no “standard” type of investor anymore. The landscape comprises a broad spectrum of investors, from newcomers seeking basic services to institutional players with specific requirements for custody and investment management.
This acquisition aligns with a larger trend in the financial services industry, where traditional custodians are adapting to capture market share from digital-first rivals. These newer players have gained popularity, especially among younger investors and those conscious of costs. Established firms are facing significant pressure from neo-brokers that have introduced competitive pricing and innovative features such as real-time settlement, reflecting the challenges traditional systems encounter.
Dwpbank maintains significant operational metrics with a portfolio of 5.3 million securities accounts and handling 53 million transactions over the past year. Its clientele is broad, encompassing cooperative banks, private institutions, and savings banks, all integral parts of Germany’s multi-tiered banking system.
Since its inception in 2020, lemon.markets has successfully raised a total of €28 million, with a significant portion acquired in a €12 million funding round led by CommerzVentures last year. The firm was granted its investment firm license earlier this year, permitting it to engage in a variety of financial services ranging from contract brokering to portfolio management.
The leadership at lemon.markets has expressed a strong commitment to maintaining its European outreach and aims to provide a top-tier Brokerage-as-a-Service platform tailored for banks, asset managers, and fintech companies. This strategic focus is bolstered by an existing partnership with major financial institutions like BNP Paribas and Deutsche Bank, which has already laid the groundwork for launching its Brokerage-as-a-Service offerings.
This merger enhances dwpbank’s capacity to serve a wider array of clients by combining the strengths of its traditional custody services with the innovative capabilities of a fintech-focused digital brokerage. As dwpbank continues to evolve, it seeks to embed itself deeper into the fabric of modern securities trading and management, ensuring that it meets the dynamic demands of today’s markets while retaining the strong regulatory foundation necessary for institutional operations. The restructured group now includes three subsidiaries: lemon.markets, dwp Service GmbH, and dwp Software Kft., all under the umbrella of the main bank, classified as a systemically important institution within the German banking framework.