On September 30, Deutsche WertpapierService Bank (dwpbank) announced the completion of its acquisition of Berlin-based fintech lemon.markets after obtaining clearance from the financial regulatory authority in Germany. This strategic acquisition integrates a digital brokerage platform with the traditional custody services provided by dwpbank, enhancing its ability to serve a diverse clientele that includes well-established financial institutions as well as emerging fintech startups. With approximately €2.2 trillion in assets under custody, dwpbank manages securities transactions for nearly two-thirds of the banks in Germany.
lemon.markets operates an innovative API-driven platform that enables financial companies to offer stock and ETF trading to their customers. It holds an investment license from BaFin, the German financial supervisory authority, and serves a variety of fintech clients, such as Pleo, Holvi, Optio, and Tomorrow.
Both companies will retain their separate branding and market operations, but they plan to collaborate on technology development. dwpbank’s WP3 platform is adept at managing complexity across multiple asset classes and trading venues, while lemon.markets emphasizes efficient services such as fractional share trading and automated workflows.
According to a board member from dwpbank, the customer base for securities is varied and multifaceted, encompassing everything from novice investors who prefer simpler offerings to institutional clients with specific needs for custody and investment services. This strategy illustrates a broader trend within the industry as traditional custodians seek to capture market share from digital-first competitors that have successfully attracted younger and cost-sensitive investors. These neo-brokers have challenged established firms by offering more competitive pricing and innovative features, such as real-time settlements that traditional systems struggle to match.
In terms of scale, dwpbank manages 5.3 million securities accounts and processed 53 million transactions last year. Its clientele primarily consists of cooperative banks, private banks, and savings institutions, reflecting the three-pillar banking system prevalent in Germany.
Since its establishment in 2020, lemon.markets has raised a total of €28 million, which includes a significant €12 million funding round completed last year with the involvement of CommerzVentures. The company secured its investment firm license from BaFin in 2023, enabling it to engage in a range of activities from contract broking to portfolio management.
The focus for lemon.markets remains centered on offering a top-tier Brokerage-as-a-Service platform tailored for banks, asset managers, and fintech companies, ensuring that it continues to address the needs of the securities market alongside dwpbank.
The acquisition aligns with a strategic response to the evolving landscape in finance, where technology integration meets regulatory requirements. The dwpbank group has now expanded to include three subsidiaries alongside the parent entity, comprising lemon.markets, dwp Service GmbH, and dwp Software Kft. Notably, dwpbank is recognized as a systemically important institution within Germany’s financial framework.