Scalable Capital, a German-based startup that aims to make investing in financial markets accessible to a wider range of consumers, is putting more fuel in its tank to drive deeper into Europe. The company has raised €60 million in equity. It will be using the funds to build out its business in the six countries — Germany, Austria, Italy, France, Spain and Netherlands — where it is already active and to expand into more. Balderton is leading the round, with participation from HV Capital out of its new growth fund and other unnamed existing backers.
Today, Scalable Capital, which started as a digital wealth management platform, now describes itself as a full-service brokerage. It has 1.2 million savings plans on the platform, which it tells me works out to over 600,000 customers, and close to €17 billion under management, with products covering ETFs, stocks, funds, bonds, cryptocurrencies and derivatives, and loans. It gives users access to investing in 8,000 stocks, 2,500 ETFs and 3,500 funds among other products; ETFs are the most popular today.
Erik Podzuweit, Co-Founder of the company, said, “we are four or five times bigger than we were at the last round. So like for like, obviously it’s a very attractive deal for the investor. But in the current market environment, I think it’s really cool that we managed to get to pull this off.”
Indeed, the fundraise may be coming at a tight time for startup finance, but one likely reason that Scalable took the money now is that, for neobrokers, the landscape is getting more competitive and crowded.
The other big forces that are playing in the market include the looming presence of AI and how it will be used both to manage investing platforms, but also investments themselves; and the general state of the economy: Generally, markets have been in the doldrums, with inflation, and unfavorable interest rates bringing a chilling effect to consumers’ inclination to take risks and invest money that could be used more immediately elsewhere.
Scalable’s positioning, as it is with others like it, is that it leaves the door open for smaller and more incremental buy-ins from its customers. On top of this, Podzuweit points out that the startup’s average user age is 35, a person perhaps with more disposable income than some of the younger consumers that other neobrokers have courted.
The focus on ramping up at a time when the market looks like it has cooled is also very much in line with the ethos of investing, where people often put down their money at lower points if they believe that it will represent a great deal in the longer run. Of course, only time will tell whether that firm belief in growth longer term will play out as hoped.
Balderton general partner Rana Yared is joining the board with this round and she said, “Scalable’s one-stop, digital-first, wealth building and generating platform brings a suite of top-class financial products to individuals across Europe, and is unparalleled in the market. We’ve been impressed by Erik, Florian and team’s vision and execution to date and are delighted to be supporting them in this next chapter.”
Source: TechCrunch