BlackRock has taken a significant minority stake in Scalable Capital in what it is describing as one of the largest funding rounds of a European digital investment manager.
BlackRock’s stake is part of a €30m funding round, with existing investors HV Holtzbrinck Ventures and Tengelmann Ventures also increasing their holdings in the digital investment manager, which is based in Munich and London.
BlackRock chief operating officer, EMEA Patrick Olson joins Scalable Capital’s supervisory board.
Scalable Capital’s total funding now stands at €41m.
Since its launch 16 months ago, Scalable Capital has gathered £217m of assets from 6,000 retail clients. The firm says it has the ability to expand its offering even across the Continent, beyond Germany and the UK where its current clients are. The offering provides a multi-language and currency platform that can operate across multiple international tax and regulatory regimes.
Scalable Capital says the changing regulatory landscape in Europe will result in the need for financial institutions to increase investor protection, value for money and transparency, meaning firms will be seeking technological solutions to assist with portfolio construction, risk management, and digital distribution.
Scalable Capital will remain an independent company. Its product selection and asset allocation decisions will continue to be independent.
Olson says: “The retail distribution landscape is evolving at a rapid pace, as consumers increasingly engage with their financial investments through technology. This trend is prompting strong demand from European financial institutions – including banks, insurers, wealth managers and advisory firms – for high-quality technology-enabled investment solutions. Our investment in Scalable Capital allows us to meet these evolving needs of our clients and their customers and to help shape their business models for the future.”
Scalable Capital co-founder and co-CEO Adam French says: “BlackRock shares our vision that technology is not just a competitive advantage but a requirement for wealth management businesses to be successful in the future. Its investment in our firm is a fantastic validation of our work so far, opens up new growth avenues for our business and firmly establishes us on the digital wealth management map in Europe. BlackRock’s backing provides a huge opportunity for us to partner with their clients to help accelerate our business with financial institutions and corporates.”