Juraj Hrbatý: How I Founded Finax

How I Got from Tennis to Finance

Finance is an inseparable part of me. Mathematics has always been my favorite subject. When my brother Dominik first began to earn something considerable from his tennis career, he invested the earned money in the stock market. From that point, I knew that my life path was in finance.

I graduated in financial management, and upon finishing my tennis referee career, I got a job in a licensed brokerage firm. I enjoyed the work. Keen on learning as much as possible about the world of finance, I continued to study and obtained the internationally recognized title of Certified Financial Analyst (CFA).

Just like doctors dream of saving lives, I believed I would help people make money on the stock exchange.

However, reality check has quickly proven this idea to be delusional. After years in business, I realized that the earnings in the financial sector are based on fees, which makes the companies remain in a constant conflict of interest with the clients, as one’s profits are increased by higher fees and the other’s by lower fees.

My family and friends kept asking me “Ďuri, what is worth investing in? Do you have a good product?” But I was selling the products mainly for the benefit of our company.

The sentence my former boss once told me after I suggested some pro-client improvements got stuck in my mind to this day: “Ďuri, can you see a red cross above that door? No! So do what I’m telling you to do, we‘re not running a charity!”

Even volatility (rapid movements in the stock market) is deemed a very pleasant phenomenon, as it induces retail investors to buy and sell more frequently. Buy at the right moment, sell at the right time, then buy again cleverly and sell again quickly. Frequent trading means more fee money for the broker.

The company’s profit has always been the top priority. Internally, I still struggled to align it with my values, but the system in place gradually smothered me, especially due to the highly lucrative rewards it offered. After all, data collected by Eurostat via their Structure of earnings survey furthermore goes to prove this. According to this dataset, financial and insurance services are among the two best-paid sectors in the CEE region.

Cancer Changed Everything

After 10 years in business, I was diagnosed with cancer, something that forever changed the way I looked at life. Everything happened very fast. Diagnosis, surgery, chemotherapy etc.

I was among the youngest patients at the daily chemotherapy department at the cancer clinic. Although my chances of making a full recovery were high, the deep looks into the eyes of suffering people every day left me struck. Here I realized how truly fragile we are, and the narrow line between being and not being. That year, two of my friends died of cancer, which emotionally struck me even more.

That's when I decided I had to make a change. I wanted to be able to reflect on the past in another 10 years and feel proud of my work. To make my children proud of their daddy and his results.

I decided to put all my experience and savings into a project that would make the clients‘ benefit a top priority. One in which we would manage clients' savings fairly and transparently. And in which we would seek to pass all the knowledge about personal finance to our clients so that they could be financially as fit as possible.

I Faced the Most Difficult Task of My Life

Building an economically functioning securities dealer from scratch without taking any clients from previous businesses is already a very difficult task as it is.

What‘s more, offering investment services exclusively online was still something unprecedented in 2017 Slovakia. Investments do not work like other consumer goods. I like to say that people tend to wake up on December morning, suddenly realizing it's time to buy Christmas presents.

Conversely, they do not wake up with the same rush with the idea of starting saving for retirement or with the need to create an emergency fund. People around me argued that Slovakia is not USA, and it is not ready to trust and invest online.

We began writing the story of Finax in this office at the outskirts of Bratislava in Vrakuňa borough. 

As if it weren’t enough, with a cheap online service, unparalleled nowhere in Central Europe at the time, and an intended 1% portfolio management fee, doing some simple math showed that I would have to get more than 100 million euros under management in a relatively short time.

Translated into real life, reaching this milestone meant that I would have to become one of the largest investment brokers in Slovakia.

When I presented my business plan at the National Bank of Slovakia, many just shook their heads. I planned to reach a turning point, when the revenues equal costs, only in the fourth year.

I had my vision, my plan, and I trusted my experience and the people I surrounded myself with. I decided to do everything in my power to make Finax a success story.

Finax's current headquarters before moving in October 2018 and in February 2020.

Ďuri, Do It as If You Were Doing It for Yourself

One of my best friends once told me that whenever he ordered a service, he would tell the contractor a beautiful sentence: "Please do it as if you were doing it for yourself." I adhered to this philosophy while building Finax up.

Apart from our home, me and my wife only possess financial assets. 97% of our financial assets are investments in Finax and only 3% are in the form of a small cash reserve in the bank. And just like any other customer, under the same conditions and at full price.  

My wealth is thus invested in the same way as the wealth of all Finax clients. None of us at Finax know a better and a more profitable way of investing than the one we offer to our clients. Furthermore it is indeed truly relieving to be finally able, with a clear conscience, to recommend a product in which my family and friends can appreciate their savings in a way that will actually prioritize them.

Finax Has Become a Well-Established Firm Very Quickly 

Many of you already know the rest of the story of Finax. We are the most successful Slovak investment startup in history. We are on the verge of managing more than one billion euros for more than 85 thousand satisfied clients across Europe.

At the Deloitte Technology Fast 50 CE competition in 2023, Finax was awarded the 1^st place in Slovakia and the 12^th place in the entire Central Europe. And we do not stay confined to just Central Europe. According to Deloitte EMEA Fast 500 2023 – a program identifying and awarding the fastest growing tech companies in Europe, Middle East and Africa, we managed to secure an amazing 85^th place.  

Furthermore, we came home as the Alternative investment firm of the year 2024 and the Product of the year 2023 from one of the largest investment conferences in Europe Invest Cuffs. 

We had a 10% market share in Slovakia in 2020 in terms of net client deposits.

In 2023, net sales of mutual funds reported an annual drop of 55,4%. However, if we compare net deposits into Finax and mutual funds, deposits into Finax have been at an all-time high. And while in 2022 our net deposits accounted for 27,4% of total fund net sale, in 2023 they hiked to a whopping 68,9% of net deposits into mutual funds.   

Finax Founders with CESAwards Best FinTech Startup 2019 award.

Planned Loss Has Shown to Be Beneficial for the Clients

Ever since we established Finax, we have had to be ready to point out all the unfairness in the world of finance. How else can you showcase that wealth building is beneficial and efficient, without comparing all the available solutions?

We’ve always been tough on competition, which involved publishing a lot of unpleasant but true articles on their account. After pleas from the competition, their correctness has even been verified by the National Bank of Slovakia. 

Therefore, it doesn’t come as a surprise that our competitors tried to look for our weak spots. After releasing our economic report for 2020, we have been met with news that Finax being at a loss should be a reason to worry.  

Since our competition has been profit-oriented for years, they deemed us being at a loss as a potential threat. A threat to the sustainability of the business model. But actually, quite the opposite was the case. I deemed our planned loss as a tool towards long-term sustainability.  

If the service is cheap (while being fair, transparent and client-oriented), it will become so popular and demanded that the business will go into the snowball effect. It occurs when you let a snowball you’ve created by honest work downhill and it will accumulate more and more snow by itself. When I take a look at our revenue dynamic, the snowball effect is evident, despite the low fees.

2019-2023 - skutočné tržby, 2024* - očakávané tržby

When I mentioned the meeting in the National Bank at the beginning of the story, where I remarked that we’re going to start making profit in the fourth year, I hit the nail directly on the head. December 2021 was the first month where our monthly revenue matched our monthly expenses. However, we only reached profit in 2024.

Frankly, I do not expect our profits to be any significant in the future. We’d like to reinvest both our revenue and potential new investments back into the company, to fund further expansion. That’s why we plan on retaining a balanced budget.

That, however, doesn’t mean Finax lacks capital. During our existence, two rounds of external financing took place with a combined value of 3,5 million euros.  

The Profit of Clients Warms My Heart and So Does Spreading Financial Education

We have already earned more than 130 million euros for our clients (as of September 2024). The most successful investors have yields exceeding 50% on their deposits in Finax. We are promoting financial literacy on several fronts, working on materials for primary and secondary schools, through publicly available podcasts, webinars and blogs of course. We have, furthermore, been invited to lecture at universities.

We have published more than 600 articles in 7 languages, produced over 100 webinars on various financial topics, and 280 podcasts where we talk about the latest events and show different paths on how to manage money and introduced Financial Coach in the Finax where we allow to track incomes and expenses.

Last but not least, we’ve introduced the Financial Wellness employee education program for companies.  

Vision, Mission and Values 

Finax was established to become a pioneer in financial service fairness. We have embedded my entire story and values into the Finax DNA – into the vision and the mission, and our team both in Slovakia and abroad abide by it.

Vision:

We create a better future, with a financially secure and care-free life.  

Mission:  

We guide people on their financial journey via simple, fair and innovative solutions.

In Finax’s future trajectory, we adhere to these values: 

• We set the bar high and lead the way.
• As a team, we deliver products we proudly stand behind.
• We design our solutions with the client’s best interests as our top priority.
• Integrity is the foundation of our relationships, both within and beyond our company.

We’re a great team and Finax is our passion. I’m already looking forward to seeing what the next year has to offer.

Six years of my journey have just passed, and I am beginning to feel that in four years, I will be able to look back and feel proud of the work I have done.

In the end, I have a kind request for you. If you find the story of Finax inspiring and want to promote our fair and transparent way of doing business, please share this article among your friends or on your favorite social network.

Thank you for granting me a chance to take care of your money, and I promise you, as my clients will forever remain my top priority.

This article provides marketing information about the products of Finax, o.c.p., a.s.