Online brokerage Scalable Capital raised $183m from investors led by Tencent, becoming the latest German FinTech to attract sizable funding.
The funding round, backed by existing investors including fund manager BlackRock Inc, HV Holtzbrinck Ventures and Tengelmann Ventures, values Scalable Capital at $1.4bn. The implementation of the capital increase is subject to regulatory approval.
It was only in July 2020, less than a year ago, that the startup raised a Series D of $58m at a $460m valuation.
The FinTech firm will invest the proceeds in developing its brokerage and wealth management businesses as it sets its sights on becoming Europe’s leading online investment platform.
Scalable, which has 250,000 customers across Germany and Austria, will invest the proceeds from the Series E round in launching in France, Italy and Spain, as well as add cryptocurrencies to its range of brokerage products.
Being in business since 2016, the asset management firm has more than $5bn in assets under management. It offers robo-advisers for exchange-traded funds for investors and flat-rate subscriptions of 2.99 euros a month for day traders.
Ten months ago, the company launched a neobroker with a unique trading flat rate. More than half of the client assets in the broker are invested in over 1,500 Exchange Traded Funds (ETFs) available on the platform, the rest is spread across over 4,000 shares and 2,000 funds.
With Tencent on board, which has also backed Berlin-based e-bank N26 and Nasdaq-listed Chinese neo-broker Futu, Scalable will be able to strengthen its appeal for millennials who invest via their smartphones, it said.
Headquartered in Munich and with an office in London, Scalable is opening a new location in Berlin as it seeks to strengthen its engineering and marketing teams. It expects its workforce to more than double this year to 400.
Commenting on the round, Scalable co-CEO Erik Podzuweit said, “Tencent complements our existing long-term partners who already represent an international investor base. Our recent funding is a major step forward on our way to becoming the leading retail investment platform in Europe. The strong acceleration of our growth further validates our mission to empower investors.
“Anyone thinking of investing money should think of Scalable Capital. Whether you want to invest yourself via our broker or want our wealth management solutions to do it for you.”
Echoing a similar sentiment, Tencent Investment managing director Danying Ma added, “Demand for accessible solutions of personal investing is increasing in European markets, particularly among millennials. Scalable Capital excels in offering its customers a convenient and cost-efficient investing experience.”
The round comes on the heels of a $900m raise by rival online broker Trade Republic led by Sequoia. Other big European players that have also recently raised big expansion rounds include Amsterdam’s Bux which snagged $80m in April) and Vienna-based Bitpanda which hauled in $170m in March.
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