Gerhard Trautmann On Raising $80 Million To Empower Shoppers To Take Smarter Spending Decisions

Gerhard Trautmann, the founder of Global Savings Group (GSG), is a bottle of untapped brilliance, a mind ready to unleash innovation. Born in Quito, Ecuador, Trautmann’s journey has been a geographical tapestry, weaving through Venezuela, the U.S., Portugal, and finally settling in Germany.

His early years in South America, fueled by his father’s work for European companies, imbibed in him a love for diverse cultures that would later become a cornerstone of GSG’s identity. GSG has attracted funding from top-tier investors like General Global Capital, Rocket Internet, Holtzbrinck Ventures, and RTP Global.

In this episode, you will learn:

• The global journey underscores the power of a diverse workforce, shaping a cosmopolitan culture that drives innovation at Global Savings Group.
• The transition from consulting to entrepreneurship highlights the importance of owning decisions and taking tangible actions, even if it means pivoting to find the right business model.
• GSG’s commission-based model, leveraging cashback, coupons, and deals, establishes a win-win scenario for consumers and advertisers, proving the effectiveness of performance-driven strategies.
• GSG’s strategic approach to mergers and acquisitions, guided by a clear playbook, emphasizes the creation of synergies, positioning the company strategically, and fostering long-term value.
• Providing equity to acquired companies, investors, employees, advisers, and customers cements a shared vision, showcasing the importance of equity as a currency of trust in building a collective ownership mindset.
• GSG’s visionary goal is to create a world where consumers find all they need on their platforms to make smarter spending decisions, streamlining the purchasing process and empowering conscious decision-making.
• Strategic milestones include achieving a balance between top-line growth and bottom-line profitability, signaling the maturation of GSG’s business model and its ability to generate lasting value.

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About Gerhard Trautmann:

Gerhard Trautmann has diverse work experience spanning multiple industries. Gerhard began their career as a PhD Student at the Institute for Supply Management from February 2005 to April 2008.

Gerhard then joined Siemens Management Consulting as a Project Manager from September 2008 to May 2012.

Gerhard’s most significant role was as a Co-Founder and Global Managing Director at Global Savings Group, a company that powers the world’s largest shopping community and rewards platform in over 20 markets.

Gerhard joined in September 2012 and continues to serve as the CEO since January 2019. Gerhard’s expertise lies in project management, strategic consulting, and building successful global ventures.

Gerhard Trautmann completed their Doctor of Philosophy (Ph.D.) degree at EBS Universität für Wirtschaft und Recht.

Connect with Gerhard Trautmann:

• Crunchbase
• RocketReach
• LinkedIn
• TheOrg

Read the Full Transcription of the Interview:

Alejandro Cremades: Alrighty hello everyone and welcome to the dealmakerr show. So today we’re going to really enjoy. You know the guest that we have today. We’re going to be talking about all the good stuff that we like to hear like building scaling financing but we’re really going to be highlighting you know pivoting you know how they win also about using him on a more on the buy side to grow inorganically.

Gerhard Trautmann: A is a bottle up brain. You can.

Alejandro Cremades: As well as the international strategy that they use to expand and also raising money in different flavors like they’ve done and also the equity you know in cash that they’ve been able to to get from investors so without further do let’s welcome our guests today jarard trotman welcome to the show.

Gerhard Trautmann: Um, hey on Hunter Thanks a lot for having me.

Alejandro Cremades: So originally born in Quito in Ecuador and then you know you spent some years too between Venezuela and the us I mean it sounds like a you being quite around the world. So you also walk through memory lane. How was life growing up.

Gerhard Trautmann: A or click. Yeah, look absolutely so we’ve we’ve spent a fair bit of time in South america that’s where I was born I spent my time there actually my my dad was working for for european companies. So we’ve been spending always 4 years in the market and in the country and then would move on and look. We loved. We loved South America in the 80 s absolute fantastic to be there. Um, and then had the chance to quickly also spend some time in the us but actually I grew up. You know majority of my time then in Portugal um, spen spent good. You know 10 years. Um. At at school close to the beach very close to lisbon had a fantastic time. They’re still miss it a lot still you know one of my favorite places for for doing vacations and has and obviously you know lisbon and the whole you know, kind of scene also for tack has become really interesting in Europe. So you know it’s great to see that and then you know went over to Germany for starting my studies um been been studying business and and I and yeah since since im basic. He’s 17 now in Germany and right now.

Gerhard Trautmann: Ah, for more than 10 years already in Munich where we’re working on our company.

Alejandro Cremades: And how do you think that having that a worldview you know being being all over the place like as we were saying in qadar us Venezuela Portugal. You know now. Germany how do you think that that has opened. You know your worldview the way that you think about things and the way that you also think about problems.

Gerhard Trautmann: So I think first or for most I think it’s it’s you know more than 40 nationalities in our company today and I think it’s it’s part of the Dna of of our company that you know from day one we you know obviously everything is in english that goes without saying but it’s been. You know from day one. We’ve been having colleagues from all over the world I enjoy the vibe you get from it I think until today we learn every day from you know, culture. You know, different bank holidays you learn so much on the way and I think for me personally I think the biggest advantage has been to wrap languages. Have some form of touchpoint um to these cultures so you can quickly integrate and have chats and actually connect with people and I think you know for me connection and trust is all about building a strong culture. So look I think it’s been It’s it’s given you some some some good. But starting point when you think about building a global company but it’s definitely something that I would say I I more enjoy in general to have this more cosmopolitan global vi in the company and and having people from all around actually come together to build great product.

Alejandro Cremades: And we’ll talk about the company global savings group in just a little bit now in your case. Um, right? after your university which you did there in Germany you decided to go into you know, different fields and and and obviously consulting was a big one I guess. When it comes to consulting I think that it prepares you in a very interesting way because it helps you on perhaps breaking down bigger problems to to smaller problems and then you know giving you farther best ability to how to go about things on the execution I guess in your in your case those years that you did in consulting. What do you think they give you. Access for this ability to and that perhaps are helping you now as an entrepreneur.

Gerhard Trautmann: Yeah, so look I think I think there’s some pros and constant. Ah, let me start with the pros I think as you said I think it gives you some really good tools when it comes down to problem solving in terms of you know, obviously modeling. When you think about hey how do I have to think about unit economics. It comes down to hey you know leadership and you know communication frameworks that you can apply top-down communication. How do you structure communication. How do you? You know, bring complex problems down into. Couple of visuals so you can bring everybody behind it and actually start with problem solving driver trees in terms of understanding and making people of where how you know specific variables impact the kpi that everybody’s working to so I think I think it gives you those very methodological tools and let’s not forget. Consulting companies in their first years put a lot of money into giving you also those trainings that you know as a classical startup. You can’t afford right? So when it comes down to moderation training presentation training all of that. It’s fantastic. Fantastic stuff. I can only recommend everyone. Has access to it to apply it because learned tons of it. How do you provide great feedback I think it shapes you both on your analytical side but also on what we classically also would call the basics of leadership and I think that’s that’s that’s a you know brutal pro.

Gerhard Trautmann: On The cons side though I have to tell you that I think you know consultants very often can be really bad entrepreneurs and I’ve been seeing that quite often. You know there’s a high risk aversity that I in general have seen from from that side I Think. From that school you very quickly are you know identifying and spotting word risks but not where opportunities I think that drives your mindset I think that’s something that you learn and consulting very quickly and I think there’s kind of this whole element of you know over conceptualizing versus actually doing Stuff. Where I think you know particularly the early years you you just very often need to stop you know conceptualizing stuff but actually get your you know your feet on the ground and actually run and and and move stuff so that’s a bit how I would look at those consulting years I’m very grateful for them I think they they definitely helped.

Alejandro Cremades: Now in your case at what point does the you know the idea of really venturing to the venture space. You know, especially here you know with global savings group. How how does that come about.

Gerhard Trautmann: For this year

Gerhard Trautmann: Yeah, so look. So we’ve been I’ve been like four to five years in the consulting space and I think one of the things that I was getting really you know, nervous bored and and actually disliking a lot is you never own your decisions and ah you know I started. Ah, started actually having to go back to restructure you know at the same client that I was consulting I was doing three or four years later I was called to restructure again and I was kind of looking at all the stuff we had recommended and basically the presentations were still. There. Nothing has been executed so that was a bit. Frustrating to see and um, look at ah had you know, sort of say 2 2 3 good friends out of university that were in a similar situation. So we said hey look how about we actually do stuff instead of recommending stuff and we really felt you know it was twenty Eleven Twenty twelve we really felt that. Also kind of the internet with providing opportunities and and it’s just a good moment to give this a try. We were all you know our mid 20 s not much to lose. But we just felt. It’s a good opportunity to give this a try and and and kind of you know, take some risk and um, you know back in time so twenty eleven 2012 there was not too much here in thebc scene and and in Germany or in general so we were running around Berlin we had you know 2 or 3 intubators here that we were talking to and we by coincidence ah stumbled over a rocketed internet.

Gerhard Trautmann: So for those who are maybe not so familiar with rocket. Um, basically a big venture building company that you know was behind companies such as c sallanddo heifresh you know and and and and and and really shifting massive one of the biggest let’s say. Ah, tech fundts that they were steering in Europe now. Um, we basically stumbled over you know met met sort of say the founder Oliva Za behind it and and we’re joggling ideas and and yeah look he hated all our ideas. But he liked this as the team and we started we started actually you know talking about doing a couple of things together and ventured into Asia helped there to build some of the Amazon clones that rockets back in time was launching as well as in Africa. So we did that for three four months until we then actually realized hey we really want to start our own thing and and together with rocket then started what you know back in time was called drop gifts.

Alejandro Cremades: So then so then what happened next.

Gerhard Trautmann: Um, so um, drop gifts literally. Um you know I’ll spare you the details what we were doing but for the sake of at least just giving a glimpse. It was it was a you know again, this is twenty twelve right so Facebook and social. Really hot shit back in time. Um, and what we were basically doing was building a gifting service within the Facebook environment very simply speaking you as a sort of say Facebook user we would kind of build an application that when you would have birthday or you would get married. Whatever event you can think of that’s we’re celebrating. You could basically send a gift card um to your friend having that event and other people would see it on the wall and they could ship in top of it and it would be a group gift right? So basically we would connect advertisers that would give us those gift cards. With consumers and put that on social media sounded like a terrific idea. Um, and and tons of people were were kind of you know, curious about it. Advertisers loved that the brands loved it because they would engage in social media. But unfortunately consumers didn’t like it at all right? So people. Seeing those gift cards on their walls perceived that as advertising right? and that definitely didn’t help in terms of getting any unit economics right? from actually getting enough people who would send a gift card to those who would receive a credit card to those that actually would redeem a gift card. So basically the whole conversion funnel was really really tricky.

Gerhard Trautmann: And that’s why after three or four months already and look. We had more than 150 people already after four months alright so that is basically we’re talking about a scale where you know we have more than 40 illegal entities set up. We were all in for launching this thing across the globe. Although the unit accom liness were not there. 1 of the things to keep in mind why we went so rapid into this is because you know we basically were sort of say copycatting a swedish role model. Okay, and we thought you know. Their business was already. You know picking up. We thought the model is kind of proven. Unfortunately, nothing was proven and you know we were already on a big scale until we actually figure. It’s way too hard way too hard to make this work and had to go massively on the brakes to then actually pivot.

Alejandro Cremades: So is that the way that you know that evolves ultimately to what we know today of global savings group.

Gerhard Trautmann: That’s a bit de droptive story in.

Gerhard Trautmann: Yeah, exactly so literally from there on right? So so so you need to imagine we went from zero two hundred and fifty back to 5 right? Which basically then in parallel you know we had to think what do we do now. And and and you know we were in this gift card space right? So we started to understand how giftf carding works how breakage works what people like what you don’t like we tried to kind of talk to lots of consumers and. And out of it. You know we step-by-step venture it into the whole space of you know how can you use gift cards Coupons, cash bag deals in general to attract consumers through different channels and actually build an own channel four big. Ecommerce advertisers. That’s a bit how we ventured into what global savings group became today but it was a very painful very painful six to nine months where you know I would say we kind of broke all the rules that you would find in the one on one of the y combinator how you should start your company right? So we went against all of them.

Alejandro Cremades: So so for the people that are listening to get it. What ended up being the business model of global savings group. How are you guys making money.

Gerhard Trautmann: Scale too early, etc, etc.

Gerhard Trautmann: So what? What? What we do today is we literally connect consumers so people like you and me with the big ecommerce stores that we all know right? Big lines of ours Amazon ebay right. Course every category you can think of right from travel to fashion. You know, ah to you know pad food. Whatever you guys buy online. Um, you know we the likelihood we work with those players is very high and we are a marketing channel for them. And that’s that’s the connection right? So basically the way you think about us is when somebody buys through one of our websites we get it cut into commission. Um, so we only get paid if there’s a you know, successful transaction happening through us. And you know literally the types of sites we operate go from cash bag sites where we basically give you part of the cash bag so you know for example, if there’s a 10% cash bag that we would get that we would offer. That’s what you get as a consumer paying through us and that’s part of the commission that we get from a partner of ours if it’s through Coupons and it’s a coupon that the partner of ours has provided or if it’s for our deal communities and it’s basically we run the largest deal communities in the world. So literally. It’s ah.

Gerhard Trautmann: Group of people actually vote if something is hot or not and they would then basically you know purchase the corresponding deal offered and as as a result all of this is commission-based it’s performance-based and we only get sort of save money. If our partners so did big merchants Actually successfully get a transaction through us.

Alejandro Cremades: Now talk to us about M and a because you guys have been using M and a tool for the growth on the buy side. So how do you think about M and a and and anything that you can tell us on this run.

Gerhard Trautmann: Um, yeah, so look. Let’s maybe start why why did we venture into M and a right? Um I think you know classically when you look into the Textbooks and this is what we saw Also in our case is when you have a highly fragmented industry. M and a starts making a lot of sense because you basically can go and address a market where you have a very similar client base a similar user base and basically to the product to a certain extent sort of say can be dragged Out. You put your own platform and then you can craft a lot of synergies.

Alejandro Cremades: Correct.

Gerhard Trautmann: Across all areas. That’s why we identified a lot of the sort of say players in our spacece are pretty profitable which basically gives you quite some opportunity to think about how you actually want to mix your financing and this is something you know with we’ve. Continuously also used. We’ll talk more about that in a second. But in general we’ve done 7 m and a deals since 2015 um, you know we did them. You know in a classical way. We would just you know through cache completely by the entity. We have had way more you know complex transactions when we would venture into new spaces. Um such. As for example, the acquisition of ikal largest cashback player in France for example, which was a hundred plus million transaction um, where we did a combination of cash debt and equity. So basically the shareholders of iqal have become also shareholders of gsg all right? so because they believed a lot in the joined combined story.

Gerhard Trautmann: And similarly with the now just very recently in January Twenty Twenty three a merger with pepper um where a very similar type of transaction happened a combination of sort of say cash adapt and equity and we.

Gerhard Trautmann: We run these you know it’s obviously you know the bigger the deals the complexity gets higher but we’ve really invested into building ourselves a proper m and a setup in order to execute this repeatedly. In order to take all the learnings from 1 deal to the next from the financing side from the screening side from you know the due diligence side and it has become a real capability and a competence that we have established um you know because we we we we we realized at the end of the day you know you. If if you have to do a lot of these and you see that the value creation is there in terms of capturing synergies and so on that you really need to plan this out super clearly upfront and you need a clear playbook you know so I think that’s that’s probably 1 of the biggest learned thats for us is there’s a clear playbook. From the day that sort of say the transaction happens on what happens six weeks after what happens 9 sort of say nine weeks after that from defining the Target operating model up to you know How do we start? which elements and areas do we basic to integrate first which things do we not integrate. And in order to really run through this and capture those synergies because you know classically what I’ve been seeing is that there’s a lot of m andade happening but the companies you know, kind of capture some of the let low hanging fruits and that’s it right? and we we from the beginning always said no we want to you know.

Gerhard Trautmann: We do. We do the mean a you know out of this strategy out of strategic perspective where we believe the value of the company is bigger as these companies come together on a one roof and where we can capture cross product synergies which means you know on the data side exploring all the opportunities we have across all the different assets we have. And actually build from there a better advertising network. Ah for our clients up to basically building private products by integrating the offering So. There’s There’s a bunch of Rationales Why we integrate pretty deeply over time and and that requires a pretty structured approach from from the beginning.

Alejandro Cremades: Now obviously you know too like when it comes to raising money on the equity side I mean you guys have raised 80000000 obviously all the debt and all that stuff you know it’s different for those acquisitions but basically on the equity side and now you know that you’re saying that.

Gerhard Trautmann: Until the end.

Alejandro Cremades: You were also providing equity to these companies that you acquired all of these folks. You know, not only investors employees advisers even even customers. You know it’s It’s all about vision and and and where you’re heading with this and as you’re thinking about vision Imagine there are that you were going to sleep tonight. And you wake up in a world where the vision of gsg is fully realized what does that world look like.

Gerhard Trautmann: So look I think it is a world where we have become so good in our product offering that as a consumer you can go tap into our sites and whatever question that you actually would want to research in the net somewhere else because imagine you’re buying. You know something a bit more complex than maybe your next night. Shoes. Let’s imagine you want to buy something that is a bit more you know in terms of the basket something that you really want to put a lot of research into um what our vision is then completed. If we minimize your entire research time you come to our product and you literally get everything you need in order to say well look I understand what I want to buy where I want to buy it. Um I totally have the best value right? which you know and I really mean value not just necessarily priced. But basically what is right for me. In terms of the product and I can do the transaction then you know I think we we accomplished our mission because you know the problem we’re seeing today is that you know people spend hours and hours still researching where to buy. There’s such an overload of. Options and opportunities you have every year thousands and thousands of new online shopps coming in. You know, red bring in your offering and you know other than you know Tik Tok and all those social media channels that kind of lure you into buying quickly that tip of your fingernail.

Gerhard Trautmann: Because an influencer tells you we really want to make sure we put all the hard work there to give you all the information at your fingertips So that you do actually a very conscious and well-reear decision and that’s what we’re working towards with all our prompt. So.

Alejandro Cremades: So so obviously here we are talking about the a future but I want to talk about the past with a lens of reflection imagine if I was to put you into a time machine. You know you’ve been at it now for almost twelve years with gsg and let’s say I was to bring you back to the moment where. Were thinking about giving your notice you know back in 2012 and and venturing into the entrepreneurial world and let’s say you had the opportunity of sitting down without younger gerard than giving your younger self on piece of advice for launching a business. What would that be ny given all you know now.

Gerhard Trautmann: In it.

Gerhard Trautmann: Yeah, so look I think I think the there is a element of truly understanding risks and opportunities of any given business model. Right? So I’m um, ah my my biggest so to say advise would be really understand you know, ah build a business where you can killly defend over time long-lasting your distribution channels own the consumers. And have the most sticky cohorts that are potentially even possible. Why I say that is because I think at the end of the day you know, whatever business we built particularly when you build B Two C like we do it all boils down about how well. You know what? what value are you providing to the user. But how do you ringface a user. How do you make sure it’s so ring-faced that that they truly are yours and and and sticky and loyal to yours and there’s so much that plays into that and I think back in time you know we were not aware of. How difficult that can be and you know we learned that over time to build it up. But I think really understanding when it comes down to the P Two C side of you know how obsessed you need to be with it and how obsessed you need to be not only to understand customers. But also how to ringface them.

Gerhard Trautmann: Um, probably that would have been. You know an advice in order to probably also adjust our strategy earlier in that direction I think we we started that but a bit later.

Alejandro Cremades: And and and what would you say for you guys as you’re looking back. What was the break point. You know the breakthrough point you know in that direction.

Gerhard Trautmann: So I think that we had we had multiple of those points I think there’s not that 1 magical moment I think we had 1 moment where we figured how to scale our business. And we felt okay now it’s gaining the traction. You know we’re growing fastly, we’re able to drive relevant revenue I think there was there was maybe five to six years down the road. Okay, well we felt okay, we’re starting to sit on something relevant here. Um, then I think there was a second turning point when you know a couple of these major. And transactions actually went through but we suddenly felt okay, look now the company is getting more and more also diversified more solid across you know, bunch of dimensions. You know we were losing dependencies from you know, maybe specific clients with specific. You know customer acquisition channels. Was maybe the second point right? because part of m and a is not always just crafting sys. But actually you know working on your positioning and making sure that you strategically would position the company better and better and more you know and and and kind of build your moats and to moats meaning really you know competitive advantages. Um, that are hard to break through for for competitors and and then I think you know, um as we then started and and I think this is this is really in the last twelve months but we really also feel that we can you know out of that. Not only generate while you know strong top line grows but also bring it down.

Gerhard Trautmann: Ah, to the bottom line right? So I think I think depending on your face. You need to prove yourself. But also you know in general that your business is able to drive value. You know across the board and I think we had probably these three milestones and and and you know I’m continuing to work on it and we’re not done far from them.

Alejandro Cremades: So for the people that are listening here that will love to reach out and say hi. What is the best way for them to do so.

Gerhard Trautmann: So look I think there’s there’s there’s a bunch of things right? Linkedin you know feel free to to just you know, put me a message there Twitter or x no problem. You know do that and happy chat also in the show notes my email address no problem.

Alejandro Cremades: Amazing. What are thank you so much for being on the deal maker show today. It has been an honor to have you with us. Thanks.

Gerhard Trautmann: Ah, you can use any of those. So.

Gerhard Trautmann: Um, thank you all hunter for having me who was great talking to you.

*****

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