Experienced creative professional focusing on financial and political analysis, editing daily newspapers and news sites, economical and political journalism, consulting, PR and Marketing. Teuta’s passion is to create new opportunities and bring people together.
Scalable Capital has raised €50 million in a Series D funding round. BlackRock and HV Holtzbrinck Ventures, among others, participated in the round.
Startups oriented on developing tech-based platforms in order to help make investments are constantly in high demand, are now basing themselves on an expanding market of investors getting more confident to rely on technology to undercut broker fees and accelerate the process. Scalable Capital, the Munich-based startup that created a platform to monitor and manage investment portfolios investing in shares, trades and exchange-traded funds for a flat fee of €2.99 per month, finally managed to close a funding round of €50 million ($58 million) in order to widen its business.
Right now, Scalable deals with approximately 80,000 clients across Germany, Austria and the UK.
Using its services both directly and through bank partners, the startup stated it has more than $2 billion under management on its platform and the plan is to build even more products for those clients, add more clients in those regions, and potentially look to more countries in Europe.
Scalable Capital Funding Was Supported by Old and New Investors
CEO Erik Podzuweit admitted that Series D was made at a post-money valuation of €400 million ($460 million).
The investment allegedly came from various new and existing investors, including BlackRock, HV Holtzbrinck Ventures and Tengelmann Ventures. It brings the total raised by the startup to €116 million ($133 million).
The last few years have seen an authentic boom of startups, and banks, often aiming at technology built by startups, such is the case with Scalable, building financial technology tools that help people circumvent slow, costly, and often less transparent legacy banking services. In place of the occupants, startups are developing apps and web-based platforms in order to enable their clients to make faster, more efficient, less costly and numerously more financial transactions.
That trend has been sped up undoubtedly in the few recent months, as people were spending a lot more time in front of their computers at home as part of social distancing measures made in order to halt the spread of the COVID-19 pandemic. Services that were usually organized in person are now transferring to being carried out online. It is true though, that this trend was present even before the coronavirus outbreak but now with even, they have more limited options, people are making the shift faster.
Getting Away from Less Beneficial investments
It seems that this is even the case in the world of investing apps.
In spite of the bigger economic fall boosted by the world health pandemic, those with money for investments are still doing so, not just in order to get to new opportunities that are being created, but also to get away from all the investments that might be less beneficial in this “new normal.”
It seems a bit paradoxical for a startup to set out to “democratize” its services for managing ones’ wealth, as Scalable likes to explain its service, considering that wealth management is not something that the most of people will ever have the resources to need to think about, but the trend seems to play out at all levels of the economy.
And that means startups are gathering assets in order to meet that demand to rattle traditional brokers.
Podzuweit therefore stated:
“In times of Covid-19, our funding round is a powerful signal; it shows that our focused, digital business model is convincing the investors.”
For now, Scalable managed to create its business out as both a B2B and B2C service. For the former, it sells its tech to banks who want to offer a “robo advisor” option to its investor clients. The B2C service was launched last month and it offers a service directly to investors themselves.