Neobrokers – Startups that are disrupting the investment industry by providing a platform for a wide range of consumers to participate in the stock market, need more incremental investment options and a modern and easy to use mobile-based interface to manage their money Continue to watch a huge amount of interest, and today comes the latest development in that story.
Scalable Capital, a Munich/Berlin startup, that provides tools for those investing in stocks to monitor and manage portfolios, manage trades and exchange traded funds for a flat fee of €2.99 per month does, has raised over $180 million (approximately €150 million). Expand your business. The company confirmed to us that the investment, a Series E led by China’s Tencent, is being made at a valuation of $1.4 billion.
That’s a huge leap forward for Scalable Capital — a lot of scaling, as it were. In July 2020, less than a year later, the startup raised a Series D of $58 million at a valuation of $460 million.
Previous investors including BlackRock, HV Holtzbrinck Ventures and Tengelmann Ventures also participated in the round. The company, founded in 2014 but commercially launched in 2016, has now raised over $320 million in equity funding.
The reason for the rapid fundraising is to strike when the iron is hot, and to give the startup some more fuel to grow at a time when other neobrokers are also seeing a lot of activity.
Scalable Capital now has 250,000 customers in Austria, Germany and the UK, more than triple the 80,000 in July. Also, assets under management increased to $5 billion ($2 billion in that last round). In another interesting twist, Scalable is also building a business as a neobroker partner for several established banks, including high-street names including ING, British Barclays Bank, Siemens Private Finance, a digital subsidiary of Santander Group. List is. OpenBank, Oscar GmbH, and TargoBank.
But while Scalable will use some of the funding to continue expanding on the continent, it also looks like its UK business is no longer accepting new clients, we are asking whether this is temporary and Brexit related, or any There is other reason and when will update we have an answer.
In total, Scalable said there are about 1,500 exchange-traded funds (ETFs) available on the platform (these are the most popular vehicles: more than half of the assets on the platform invest in them). It also offers the facility to invest in around 4,000 different stocks and 2,000 funds. These are all set to grow as well as potentially launching new products.
“We see a huge demand for investing in capital markets instead of leaving money in bank accounts. This comes against a backdrop of record-low interest rates, rising inflation and a widening pension gap”, says Florian Prakar, co-CEO and co-founder of Scalable Capital, in a statement. “Our clients are fully managed globally. Access a diverse ETF portfolio and – in a single app – self-directed trading in stocks, ETFs, cryptocurrencies and funds. We also offer a market-leading offering of ETFs, Stocks and Crypto monthly savings plans. We are planning to start derivatives trading going forward. We will continue on our mission of making everyone an investor.”
Meanwhile, the company is also growing at a time when others in the same space are doubling down as well. Last month, Trade Republic – another neobroker from Germany – announced a $900 million investment led by Sequoia at a valuation of $5 billion. Other big European players that have recently raised major expansion rounds include Amsterdam’s Bucks ($80 million in April) and Vienna-based Bitpanda ($170 million in March).
Interestingly, Tencent also led the final round of Bux, which is a part of its larger investment efforts in both fintech and the sector. Other big fintech bets include Viva Wallet in Greece; NuBank in Brazil, which also announced a big round yesterday; N 26; and Futu, a Nasdaq-listed Chinese neo-broker. It has built an extensive gaming empire with a series of major acquisitions including Supercell.
“Tencent complements our existing long-term partners who already represent an international investor base. Our recent funding is a major step towards becoming the leading retail investment platform in Europe. The strong acceleration of our growth is designed to empower investors. further validates our mission”, says Eric Podzuvit, co-CEO and co-founder of Scalable Capital, in a statement. “Anyone looking to invest money should consider Scalable Capital. Whether you want to invest yourself through our broker or want our wealth management solutions to do it for you.”
Fintech interest is particularly noteworthy, given that Tencent is also the parent of China’s messaging behemoth WeChat, which has made huge inroads among consumers around a range of financial services.
“The demand for accessible personal investing solutions is growing in European markets, especially among Millennials. Scalable Capital excels in providing its clients with a convenient and cost-effective investment experience. Danning Ma, Managing Director, Tencent Investments, said in a statement. “We are delighted to be an investor and participate in the growth of Scalable Capital.”