A conversation withTonia Zimmermann & Luba Schönig

Swiss startup UMushroom aims to advance financial education

The two founders of the Swiss startup UMushroom have dedicated themselves to financial education. With their digital platform, they aim to expand into European countries and later onto other continents.

Swiss startup UMushroom aims to advance financial education

At the beginning was a television documentary about the wonderful world of mushrooms. They form connections and communicate with each other, they are all of equal value. They contribute to their ecosystem and maintain its balance. Luba Schönig and Tonia Zimmermann thought the financial system should operate similarly, and they expanded on this idea.

In November 2020, the experienced bankers finally founded the financial startup UMushroom. The Swiss women bring together over 40 years of cumulative expertise. They have worked at institutions such as J.P. Morgan, Goldman Sachs, Lehman Brothers, Julius Bär, and Credit Suisse, where the two also collaborated for some time. With that kind of knowledge and their network, they created a digital platform as a hub for financial education and exchange. UMushroom aims to bring together individual investors and those aspiring, banks, brokers, and asset managers. It supports users with easily understandable financial information, securities data, online seminars, and podcasts to acquire or deepen knowledge about investment and finance.

Utilizing collective intelligence

The startup relies on collective intelligence: besides analyst evaluations, insights from social media and user knowledge are used to learn from each other within a protected space and to build test portfolios. Users can evaluate and comment on stocks, funds, ETFs, cryptocurrencies, and investment strategies.

Banks, brokers, and asset managers, on the other hand, get a platform and communication channel to showcase their products and make contacts. UMushroom itself does not offer banking services or robo-advisory; according to the company it is purely a knowledge and learning platform.

We aim to show that it makes sense to address this topic.

Tonia Zimmermann, UMushroom

The founders see a significant need for this initiative. "Investing is a fascinating craft. And we believe everyone should be familiar with it," says Schönig. "However, very few people have an idea of what money is, and even fewer know how to invest it. Financial well-being is strongly neglected in the education system. We aim to show that it makes sense to address this topic," adds Zimmermann.

Intuition and clarity

The startup generates revenue through courses and participation from financial professionals on the platform. "We firstly earn from the customer who books financial education. Secondly, from asset managers if they want to use us as a communication channel, although we do not charge money for the products to be on the platform. We are independent and do not compromise. And thirdly, with banks, we also earn a share of the trading execution," explains Zimmermann.

The financial industry is partly responsible for people not wanting to deal with financial matters.

Luba Schönig, UMushroom

The founders emphasize speed, simplicity, intuitive processes, and clarity. One reason why many people find dealing with financial matters annoying, as per Schönig, is the specialized language prevalent in the financial industry. "The financial industry is partly responsible for people not wanting to deal with financial matters because of information asymmetries and the language our industry speaks. Normal people don't understand it," she states. "Banks have a jargon that no one understands", corroborates Zimmerman.

Capital raised

Their goal is to keep the terminology understandable and allow customers to find the information they seek with just a few clicks. UMushroom has data on around 120,000 approved funds and ETFs in Germany and Switzerland, the 5,000 largest stocks by market capitalization, and the 200 most significant cryptocurrencies.

After an initial capital raising in October 2021 of CHF 2 million from a tech investor in their business circle, UMushroom raised another CHF 1.5 million in mid-2022 for expansion. At the beginning of the year, the platform already opened to users in Germany, Austria, the Netherlands, the UK, and Spain. More countries are expected to follow.

Our dream is to become the Amazon of investments – the global platform for investments.

Luba Schönig, UMushroom

The ambitions are high. "Our dream is to become the Amazon of investments – the global platform for investments," notes Schönig. "In a first step, we want to be present in almost all European countries." They hope to be well-established in Europe and accessible to platform users in most continent states by 2026 at the latest. Schönig and Zimmermann also see opportunities in Africa, where digitization is more advanced, and in Asia. The current 16 UMushroom employees are physically divided between the Zurich headquarters and Bulgaria, where IT employees are based.

Partnerships with universities

To attract customers, UMushroom also enters into partnerships with universities to include financial education in the curriculum. The startup further collaborates with companies that book seminars for their employees and increasingly advertises on digital channels. In Switzerland, they currently have around 5,000 customers, says Zimmermann. "The goal is to reach the five-digit range by the end of the year through digital marketing and to reach the low or at least nearly six-digit range next year."