Fund giant BlackRock has entered the European robo advice market by taking a minority stake in Scalable Capital, according to a person with knowledge of the matter.
BlackRock led a $33 million funding round for Scalable alongside the startup’s two existing venture capital investors in Germany, said the person, who asked not to be identified because the information hadn’t been announced. Reuters reported the investment earlier Monday.
Scalable, an online financial advisory firm with offices in Munich and London, was founded in 2014. The investment is expected to be completed in the third quarter, according to the person.
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The firm's decision has advisers and clients questioning the investment policies and maturity of the digital platform.
June 29 -
The robo adviser expands its offerings and is developing a memo to answer concerns after the firm temporarily suspended trading the morning after the Brexit vote.
September 14 -
Robo advisor seeks to add a piece of the $4.6 trillion market to its business.
September 11
BlackRock, the world’s largest money manager, has backed other robo firms in recent years. In 2013, it invested in digital wealth-management startup Personal Capital. Two years later, it acquired FutureAdvisor for $150 million. New York-based BlackRock, which oversees about $5.4 trillion, invested in iCapital Network late last year.
The expansion of hybrid platforms and bank digital advice promises big changes and fierce competition in automated wealth management.
The robo advisory space has been heating up in recent years as valuations for at least two startups in the space, Wealthfront and Betterment approach the $1 billion unicorn mark. Large Wall Street banks such as JPMorgan Chase, Goldman Sachs and Citigroup have also been investing in the industry.
U.S. assets managed by robo adviser services are expected to reach $435 billion by 2018, according to research firm Aite Group. The trend of automated investment advice is most developed in the U.S. but also rising in Europe and Asia.
BlackRock declined to comment.
