Scalable Capital Raises $28M

Munich-based robo-advisor platform, Scalable Capital, has raised a further €25 million in growth capital, two years after BlackRock invested €30 million, writes Jane Connolly of Fintech Futures (Finovate’s sister publication).

Handelsblatt reports that HV Holtzbrinck Ventures and Tengelmann Ventures also took part in this round.

Founded in 2016, Scalable aims to target high-earning young professionals, who invest an average of €35,000. Customers can answer a list of questions about their experiences and objectives, to receive a recommendation for a portfolio of listed index funds (ETFs).

Although the amount raised is relatively low for the industry, Scalable Capital founder Erik Podzuweit said, in the Handelsblatt Disrupt podcast: “Actually, we did not need the money, because unlike some other business models, each customer pays for the offer.”

He added: “So we took the money and can now grow a little faster and at the same time still keep something in reserve.”

BlackRock acquired just under a third of the company two years ago. Despite the capital increase, the founders still have ownership of more than a quarter of the business.

Scalable Capital demonstrated its technology at FinovateEurope 2016. Last month, the company teamed up with Futurae to add multi-factor authentication to its investment platform. This spring, the company was named to the Wealthtech 100.

Finovate Alumni News

On Finovate.com

  • Scalable Capital Raises $28 Million.
  • Finicity Launches Student Loan Account Verification.

Around the web

  • Splitit announces partnership with music software provider Ableton.
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  • Western Union deploys customer journey optimization solution, Nexidia, from Nice Systems.
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  • Quadient unveils new archived document and data retrieval solution.
  • Euromoney features BioCatch in its look at the fintech scene in Israel.
  • SuperMoney tops $2 billion in loan requests via its online lending marketplace platform.

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

Finovate Alumni News

On Finovate.com

  • Content Capture Innovator Ephesoft Allies with Grant Thornton.
  • Gusto Raises $200 Million with $3.8 Billion Valuation.

Around the web

  • TD Ameritrade offers voice-activated investing technology.
  • NIIT Technologies’ revenue grew 16+% YoY, and its after-tax profit increased 2% YoY.
  • Scalable Capital partners with Futurae to add multi-factor authentication technology into its investment platform.
  • LoanScorecard goes live with its Bank Statement Analyzer tool.
  • Betterment adds savings and checking accounts to its offerings.
  • U.K. neobank revverbank to deploy cloud banking technology from Finastra.
  • CardFlight partners with PAX Technology to make SwipeSimple terminal available to clients on the PAX A920 and PAX A80.
  • Australia’s Volt Bank teams up with FIS to power its mobile and card payment services.
  • Alterna Bank unveils its new advanced digital platform, Forge, powered by Backbase.

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

Finovate Alumni News

On Finovate.com

  • The ID Co. Unveils its Income Verification Solution.
  • Finicity Partners with Pulte Mortgage to Accelerate Asset Verification.

Around the web

  • CBANC hires Mike Snavely as Chief Commercial Officer.
  • Congrats to 3rd Eyes, ArthaYantra, aixigo, BaseVenture, Capitalise, Entersekt, eToro, Finantix, Fincite, Finhorizon, ForwardLane, Hydrogen, Scalable Capital, Sentifi, Tradeit, Trizic, WealthWizards, WealthForge, and Xignite on being recognized in the Wealthtech 100.
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    • Nordigen opens new office in Spain to expand operations.
    • Yseop’s AI solution for Société Générale wins award for most innovative initiative of the year at this year’s Digital Finance Awards. Come see Yseop at FinovateSpring next month.
    • Contovista and NDGIT expand partnership, enabling Contovista to be implemented via the German NDGIT API marketplace.

    This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

    Scalable Capital Launches in Switzerland

    Scalable Capital is saying, “Gruetzi mittenand” to Switzerland today.  The U.K.-based robo advisor has launched its services in Switzerland, the fourth country to which Scalable Capital has expanded, following launches in U.K., Germany, and Austria.

    Describing Switzerland as “an interesting market for every wealth manager,” Scalable Capital Co-founder Simon Miller said that the company made the move knowing it could offer real value to Swiss retail investors. Miller added, “We are the only independent robo-advisor in Europe using three key building blocks to build a truly customer-centric product: professional risk management for every individual portfolio, low cost, and a comprehensive digital service with unparalleled transparency.”

    With a Swiss customer phone hotline, as well as a website aimed specifically to serve Swiss customers, the startup has an E.U.-wide approval and can offer its services across the E.U. without having to go through additional application processes. Scalable Capital’s German custodian bank partner, Baader Bank AG, will provide tax reporting and will serve as the custodian bank for all Swiss customers, managing their portfolios in euros.

    Scalable Capital was founded in 2014 and now serves more than 20,000 clients with $810 million (£600 million) assets under management. The company holds partnerships with BlackRock, Siemens Private Finance, and Germany’s third-largest retail bank, ING-DiBa.

    Scalable Capital most recently presented at FinovateEurope 2016. The company has 70 employees and has raised $49 million. Last spring, Scalable Capital was the only European startup to be recognized on CNBC’s Upstart 25 list.

    Finovate Alumni News

    On the web

    • Scalable Capital Launches in Switzerland.
    • Gusto Partners with Accounting Platform Aplos.
    • Alfa-Bank Collaborates with HashCash to Bring Domestic Payments to the Blockchain.
    • ID.me Powering Single-Sign On for VFW’s Digital Platforms

    Around the web

    • ACI Worldwide announces its UP Merchant Payments solution now available as a cloud-based service.
    • Truphone, Featurespace and PayStand win spots on The Silicon Review’s 50 Smartest Companies list for 2017.
    • Bank Info Security features Nick Armstrong, CEO and founder of identitii.
    • Walmart Labs veteran Adnan Habib joins Roostify as VP of Engineering.
    • Realty Mogul appoints interim Chief Investment Officer Chris Fraley as its official CIO.
    • Klarna extends its partnership with ACI Worldwide.

    This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

    Finovate Alumni News

    Around the web

    • ACI Worldwide supports cross-border e-commerce in Brazil with integration of payment processor and gateway, PagBrasil.
    • Revolut is the latest fintech to apply for a European banking license.
    • Fenergo teams up with Opus to improve integration of risk-relevant information in the KYC process.
    • KAMCO Investment Company chooses Fusion Invest from Finastra to accelerate growth.
    • Bluefin Payment Systems unveils PCI P2PE sub-listing option for users of its Decryptions as a Service (DaaS) offering, Decryptx.
    • Ping Identity adds support for companies seeking PSD2, open banking compliance.
    • Trustly tops €10 billion in total payment processing volume since inception.
    • Q2 Holdings named to Deloitte Technology Fast 500 for second consecutive year.
    • Stratumn completes a blockchain experimentation connecting 14 insurance companies in France.
    • nCino debuts in top half of Deloitte’s 2017 Technology Fast 500.
    • Scalable Capital hits €500 million in assets.
    • Checkbook.io disrupts class action payments.
    • Compass Plus assists Almazergienbank to support the issuing and acquiring of JCB cards.
    • NetGuardians and Swisscom launch fraud prevention service.

    This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

    Finovate Alumni News

    On Finovate.com

    • Ledger Partners with Intel to Boost Blockchain App Security.
    • BioCatch to Power Behavioral Biometrics for Samsung SDS America.
    • Clinc Teams with Enacomm to Bring AI Chatbots to Small Banks and Credit Unions.
    • Finn.ai Powers Facebook Messenger’s First, Fully-Featured, AI-Powered, Virtual Banking Assistant.

    Around the web

    • PayPal launches PayPal for Marketplaces
    • Forbes: Banks Wanted To Sink Kantox— Now They’re Vying For Its Technology
    • Zumigo’s  Zumigo Assure now prevents payment fraud even when card numbers are compromised.
    • SecureKey collaborates with Intel to enable consumers to access its blockchain-based digital identity technology via traditional web browsers.
    • Finicity launches online platform that allows lenders to order, manage and monitor digital verification reports.
    • DAVO’s Sales Tax App, now available in the Square App Marketplace.
    • D3 Banking partners with P2P payments network, Zelle.
    • Behavioral biometric technology from BioCatch to be integrated into Samsung’s Nexsign platform.
    • Top Image Systems introduces its eFLOW AP solution for SAP.
    • Zafin offers its miRevenue platform as a cloud-based SaaS solution.
    • Scalable Capital provides BlackRock employees with streamlined access to its investment management services.

    This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

    Finovate Alums Earn Spots in European Fintech 100

    Powered by collaborative Belgian innovation platform, B-Hive, and Dutch financial consulting firm, Alex van Groningen BV, the European Fintech Awards & Conference recognize fintech innovators working in a variety of areas ranging from the Blockchain/Bitcoin and Financial Inclusion to InsurTech and Payments.

    The awards consist of a European Fintech 100 and a Top Three which will be selected from among the top three startups in each of the conference’s nine categories during a pitch contest at the end of September. Here are the Finovate alum finalists who will compete for top honors in their respective categories this fall.

    Dorsum (FinovateEurope 2017)

    • Category: Innovative Banking Software
    • Founded in 1996
    • Headquartered in Budapest, Hungary
    • Róbert Kő is CEO and Founder

    Meniga (FinovateEurope 2017)

    • Category: PFM / Robo Advisory
    • Founded in 2009
    • Headquartered in London, U.K.
    • Won Finovate Best of Show three times
    • Georg Ludviksson is CEO

    Revolut (FinovateEurope 2015)

    • Category: Challenger Banks
    • Founded in 2013
    • Headquartered in London, U.K.
    • Nikolay Storonsky is CEO and founder

    TWINO (FinovateEurope 2016)

    • Category: Alternative Finance
    • Founded in 2015
    • Headquartered in Riga, Latvia
    • Jevgenijs Kazanins is CEO

    Below are the Finovate alums that have been named to the European Fintech 100.

     

     

     

     

    See the full European Fintech 100 list.

    Interested in fintech in Europe and the U.K.? Finovate brings its new, expanded format to London in February. With live demos on Days One and Two, and a diverse range of keynotes, panel discussions, and round tables with fintech professionals on Days Three and Four, FinovateEurope 2017 is an event you won’t want to miss. Visit our FinovateEurope page today to learn more and to take advantage of huge early-registration savings.

    Scalable Capital Raises $33 Million in BlackRock-Led Series B

    In a round led by BlackRock, robo advisor Scalable Capital has raised $33 million (€30 million) in new capital. Also participating in the Series B were existing investors HV Holtzbrinck Ventures and Tengelmann Ventures. The company, with offices in London, U.K., and Munich, Germany, now has total funding of more than $45 million (€41 million). The investment gives BlackRock a minority stake in Scalable Capital; BlackRock’s Chief Operating Officer of EMEA, Patrick Olson, will join Scalable Capital’s Supervisory Board.

    Adam French, Scalable Capital co-founder and CEO U.K., said the investment served as a “fantastic validation of our work so far” and would “open up new growth avenues” for the company.  French added that bringing technology to bear in the wealth management business was “not just a competitive advantage, but a requirement for wealth management businesses to be successful in the future.” BlackRock’s Olson put the investment in the context of growing demand from European wealth managers and advisors for “high-quality technology-enabled investment solutions.” The firm’s investment in Scalable Capital, Olson said, “allows us to meet these evolving needs of our clients and their customers and to help shape their business models for the future.”

    Pictured (left to right): Co-founders Erik Podzuweit (Co-CEO) and Adam French (U.K. CEO) demonstrating Scalable Capital at FinovateEurope 2016.

    With more than €250 million in assets and more than 6,000 retail clients, Scalable Capital is a digital investment manager that invests client funds in globally diversified exchange-traded fund (ETF) portfolios. Calling itself “a service so cost-efficient, honest, and transparent that even a banker could use it, Scalable Capital differentiates itself from its rivals in the robo advisory space by its commitment to superior risk management. “We’ve developed a risk management technology which was previously reserved for institutional investors,” French announced at the beginning of his company’s FinovateEurope demo, adding “And we’re really excited to take this technology, and put it in the hands of retail investors.”

    During their live demo, French and co-founder Erik Podzuweit showed how investors could determine their precise risk tolerance level and see how their willingness to take (or reduce) risk would likely affect future returns. Scalable Capital also avoids the vague marketing jargon that describes portfolios as “conservative” or “moderate” or “dynamic.” Podzuweit explained, “At the end of the day, that doesn’t tell you anything. What is a ‘moderate’ portfolio? Can I now lose half my portfolio more or less? And will this ‘moderate’ portfolio always stay moderate in all market conditions?” Instead, Scalable Capital quantifies the risk and gives it an institutional risk measure, value at risk. This measure gives investors a sense of maximum potential losses over a one-year horizon within a 95% likelihood.

    “Why do we stress this risk point so much?” Podzuweit asked. Answering his own question, he continued: “Because risk, apart from costs, is the most important factor in investing. Risk is the currency you buy long-term performance with. And our clients should decide themselves how much of their currency they want to put on the table.”

    Featured last month in Money Marketing, Scalable Capital was named to FinTechCity’s FinTech 50 this year, as well as being recognized for Financial Innovation of the Year from the Online Personal Wealth Awards. The company announced a doubling of assets in the first three months of the year to €200 million, the same month French earned a spot on the 2017 PAM Top 40 Under 40 roster. Founded in 2014, Scalable Capital demonstrated its risk management technology at FinovateEurope 2016.