Scalable Capital Secures $175M for European Expansion: A Look into the Future of Retail Investing
Capital firm, Scalable, secures additional investment funds
In a major funding round, neobroker Scalable Capital has bagged an impressive $175 million (approximately €155 million), led by Sofina and Noteus Partners. Notable existing shareholders like Balderton Capital, Tencent, and HV Capital also participated in this high-stakes investment. So, what does this mean for the future of retail investing? Let's dive into the details.
Setting the Stage for Growth
Erik Podzuweit, co-founder and co-CEO of Scalable Capital, said, "Noteus Partners and Sofina match perfectly with our global investor base. This latest funding round is a clear validation and an important milestone on our journey to becoming the leading investment platform for retail investors in Europe."
The new funds will be used to bolster the fintech's vertically integrated platform to better serve retail investors with affordable investment products. According to Florian Prucker, co-founder and co-CEO of Scalable Capital, "This investment will help us accelerate our development as a digital investment platform, offering investors affordable and accessible financial products."
New Directions for Scalable Capital
Recently, Scalable Capital made significant strides in expanding its capabilities by launching its own trading platform, the European Investor Exchange (EIX)—a move away from the traditional rebates model. The Munich-based firm partnered with the Hanover Stock Exchange for this ambitious project. EIX is jointly operated with the Hanover Stock Exchange, which is owned by Boag Stock Exchange AG.
In addition, an application for a license to conduct deposit-taking business has been submitted to enable Scalable Capital to accept deposits in the future, beyond its current deposit-keeping services provided by partner banks and money market funds like Deutsche Bank, J.P. Morgan Asset Management, DWS, and Blackrock.
Valuation on the Rise
With the current financing round, investors have collaborated on over $535 million (approximately €470 million) to support Scalable Capital's growth since 2015. Initial success came from automated investment via robo-advisory, but brokerage activities now form the core business, accounting for the majority of revenues and driving steady growth in customers, transactions, and assets.
The company is well on its way to surpassing a valuation of €1.5 billion ($1.7 billion)—a significant increase since its $1.4 billion 2023 projection. Podzuweit projects that assets will grow from €30 billion to over €100 billion within three years.
Embracing Challenges, Seizing Opportunities
Though Scalable faces regulatory complexities across Europe, partnerships with regulated banks and compliance with BaFin help mitigate these risks. The company is well-equipped to navigate these challenges and capitalize on opportunities for growth in the European retail investing landscape.
In conclusion, the recent funding round underscores the faith investors have in Scalable Capital's vision of providing accessible and affordable investment opportunities for retail investors in Europe. With a projected asset growth from €30 billion to over €100 billion within three years, the company is positioned to reshape the retail investment landscape in the near future.
This significant $175 million investment, led by Sofina and Noteus Partners, indicates a clear focus on technology to enhance Scalable Capital's platform, aiming to offer retail investors affordable and accessible financial products in the realm of finance. This funding also supports Scalable Capital's ambition to employ technology in their revolutionary projects, such as the European Investor Exchange (EIX), which seeks to disrupt the traditional trading model.
