BlackRock Said to Acquire Stake in Robo-Adviser Scalable

Updated on
  • World’s biggest asset manager leads $33 million venture round
  • Scalable Capital runs online advisory platform in Europe

Fund giant BlackRock Inc. 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 30 million euro ($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.

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 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 & Co., Goldman Sachs Group Inc. and Citigroup Inc. have also been investing in the industry.

Automated financial services known as robo-advisers are software programs 
that use algorithms to do what flesh-and-blood financial advisers do, but at a 
far lower cost. U.S. assets managed by robo-adviser services are expected to reach $435 billion by 2018, according to the 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.

(Updates with deal timing in third paragraph, prior investments in fourth.)
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