Only two of Germany’s top 10 most valuable unicorns are profitable on an annual basis, Sifted can confirm.
That’s despite mounting pressure on companies from investors to steer themselves toward profitability amid a tough fundraising environment.
Solar company Enpal was profitable in 2023 and is eager to ensure it remains profitable in 2024, it tells Sifted. Trade Republic also reported a net profit in 2023 for the first time in the company’s history.
Some of the companies on the list that have not yet made a profit say that they deliberately stay in the red in order to make investments and grow their businesses, but that profitability is an achievable goal further down the line.
Profitability, alongside strong revenue growth, is also key for these companies as it is seen now by many investors as a prerequisite for a public listing. The list includes companies that many bankers and investors see as strong future IPO candidates, such as N26, Flix and Personio.
It’s worth noting that two companies declined to share recent financial performance numbers with Sifted, so more companies could be profitable than Sifted was able to confirm.
Read on for more details.
Celonis
Most recent valuation: $13bn
Process mining company Celonis says it does not disclose any numbers related to revenue or profit.
However, a spokesperson says that Celonis was bootstrapped and therefore cashflow positive in its first five years, and only received external funding for the first time in 2016. It used the cash to expand into new markets and “increase the capabilities” of its technology.
The company’s last financial results from June 2018 to the end of May 2019 show an annual loss of €6.5m.
N26
Most recent valuation: $9bn
Berlin-based neobank N26 says it expects to halve losses in 2023 and is “on track” to reach profitability on a monthly basis in the latter half of 2024.
N26’s 2022 filings, its latest, show that its net losses accelerated in 2022, increasing by 24% on year to €213.4m. The company puts this down to investment in compliance and anti-money-laundering controls, following a customer growth gap implemented by German financial regulator BaFin in 2021.
The company also increased its gross revenue by 24% to €236.3m in 2022 as a result of “strong growth in customer deposits”, the bank tells Sifted.
Becoming profitable is crucial for N26 if it plans to IPO in the future. In previous years, non-profitable companies could list, but in the current economic environment, with a fast increase in interest rates, public investors and bankers say they’re expecting companies to deliver on profits sooner rather than later.
Personio
Most recent valuation: $8.5bn
HR tech Personio is not yet profitable, but its CEO Hanno Renner says that is quite deliberate.
“While we could steer the company to profit anytime, our focus remains on investments in innovation and growth within a prudent financial strategy — an approach which has been crucial to our success so far,” says Renner, adding that Personio is set to launch several new product features this year, including Personio Payroll.
2023 was a busy year for Personio. It opened a new office in New York with the aim of doubling its US workforce, and also converted its company form to a Societas Europaea (SE) to ready itself for an eventual IPO.
Its latest financial report from 2021 shows the company brought in €50m in revenue, while annual net losses were €111m.
Trade Republic
Most recent valuation: $5.5bn
Berlin-based online broker Trade Republic reported a net profit in 2023 — the first time it turned a profit since its founding in 2015.
The previous year, in 2022, Trade Republic made a net loss of €145m, according to company filings.
Since the company secured a full EU banking licence in December 2023, Trade Republic will be able to diversify its revenue streams and make money from customer deposits.
On Tuesday, Trade Republic marked its move into payments with the launch of its Visa card, combining spending and savings.
Trade Republic declined to comment on its recent revenue figures. But its most recent reported revenue in 2021 was €94m.
Wefox
Most recent valuation: $4.5bn
Digital insurance broker wefox told various media outlets last year that it was eager to become profitable in 2023. In May, the company raised $110m — $55m from existing investors and a $55m credit facility from J.P. Morgan and Barclays — in a second closing of its series D round, keeping its valuation at $4.5bn.
It raised another $55m in debt from Deutsche Bank and UniCredit in November.
The company says it’s still “in the process of closing the books for 2023”, but preliminary signs show that December may have been the company’s first month of positive adjusted EBITDA (earnings before interest, tax, depreciation and amortisation).
Its last filings in 2021 show annual losses of €8m.
Flix
Most recent valuation: $3bn
Travel tech company Flix reached profitability on an EBITDA level for the first time in 2022.
It continued to perform well in the first half of 2023. Between January to June 2023, it grew its revenue to €860m, an increase of 54% compared to the same period in 2022.
In the first half of 2023, Flix also reported an adjusted EBITDA result of €26m, with a margin of 3%, which is considered very healthy, given that its revenue growth during this period was high.
In 2024, Flix is planning to launch in India, its 42nd market to date.
Contentful
Most recent valuation: $3bn
The headless content management system saw its revenues drop from €80m in 2021 to €9m in 2022. Although the company’s losses tapered in this period: dropping from €60m in 2021 to €6.8m in 2022, according to the latest company filings.
A spokesperson commented: "With faster revenue growth than expense growth, our losses narrowed steadily during 2023, which puts us on a trajectory to be cash flow positive. We are investing in our future growth, specifically expansion efforts into new markets and products."
Enpal — profitable
Most recent valuation: $2.5bn
Solar company Enpal achieved profitability for the first time in 2022 and remained profitable in 2023. This is despite “heavy investments” the company made in new areas of business such as VPP (virtual power plants), heat pumps and setting up its internationalisation strategy, the company says.
“We have been able to more than double our revenue in 2023, despite a challenging macro environment and various political decisions that put the entire growth of the renewable energy market in Germany at risk (heat pump subsidy programme delay, the failed e-mobility subsidy programme),” a spokesperson comments.
In 2024, the company plans to remain profitable, while also continuing on its growth trajectory to install a million energy systems by 2030.
Sennder
Most recent valuation: $2.1bn
A digital freight forwarder that connects large commercial shippers with small freight carriers, sennder tells Sifted that it is not yet profitable, but that it is “accelerating its path toward profitability in 2024”.
It adds that the business experienced considerable growth in 2023 through establishing partnerships with “key industry players” like Poste Italiane, a postal services company in Italy, and Scania, a Swedish manufacturer of commercial vehicles like trucks, lorries and buses.
Forto
Most recent valuation: $2.1bn
The digital freight forwarder and shipping management platform for sea, air and land cargo says it doesn’t comment on its financial performance, and its latest filings are from 2020.
In that year, Forto generated sales of €78m, up from €33.5m in 2019, which the company noted in its 2020 accounts was largely down to the opening up of new customer segments, particularly in imports from China and East Asia.
At the same time, it posted an annual loss of €34.3m, up from €15.6m in 2019. The company noted in its accounts at the time that the losses were down to the costs required to expand business activities and “the high volatility of market prices”.
Forto declined to comment on its plans and aims for 2024.
This piece was updated to include a comment Sifted received from Contentful after publication.
This piece was also updated to reflect the fact that Trade Republic was profitable in 2023.
