Scalable Capital, the Munich-based neobroker, has successfully raised €60 million in equity ($65 million) to further expand its operations across Europe. The funding round, led by Balderton, also saw participation from HV Capital and other existing investors. Despite the company’s significant growth over the past couple of years, the valuation has remained the same as its previous funding round at $1.4 billion.
Key Takeaway
Scalable Capital has raised $65 million in funding, maintaining its
.4 billion valuation. The neobroker plans to use the investment to expand its business in existing and new European markets. With its transition from a digital wealth management platform to a full-service brokerage, Scalable Capital aims to attract more customers with its diverse range of investment products. Despite increasing competition and market challenges, the company remains focused on growth and building out its offerings.
From Wealth Management to Full-Service Brokerage
Originally starting as a digital wealth management platform, Scalable Capital has evolved into a full-service brokerage. With over 600,000 customers and €17 billion under management, the neobroker offers a wide range of investment products, including ETFs, stocks, funds, bonds, cryptocurrencies, derivatives, and loans. Users have access to over 8,000 stocks, 2,500 ETFs, and 3,500 funds, with ETFs being the most popular choice.
A Competitive Landscape and Financial Pressures
While the funding round comes at a tight time for startup finance, with heightened competition in the neobroker space, Scalable Capital remains focused on its growth strategy. The recent entry of Robinhood into the European market and the full banking license acquired by Trade Republic pose challenges for Scalable Capital. However, the company intends to differentiate itself by focusing on building new markets, launching more products, and optimizing its approach without pursuing a banking license at the moment.
Investing in a Challenging Market
Scalable Capital’s positioning as a neobroker that caters to a slightly older demographic gives it an advantage. With an average user age of 35, the platform attracts individuals with more disposable income. Additionally, the company’s strategy aligns with the investment principle of buying at lower points in a market cycle to benefit in the long run. Despite a cooling market, Scalable Capital’s forward-thinking approach aims to capitalize on future growth opportunities.
