Berlin-based Upvest, a fintech company, announced on Wednesday, October 11, that it has partnered with BlackRock, a global asset manager and technology provider, to make investing more accessible for Europeans.
Besides the partnership, Upvest has also raised €30M in funding with participation from BlackRock alongside existing investors including Bessemer Venture Partners, HV Capital, Earlybird, Notion Capital, ABN Amro Ventures and 10x Capital.
Upvest says that the funding round is one of the largest in the German fintech industry.
What does Upvest offer?
Founded in 2017, Upvest which is regulated by the German supervision authority is a fintech company with an aim to simplify the investment process for customers.
It offers an Investment API to help financial institutions provide investment products such as stocks and Exchange-Traded Funds (ETFs) in nominal, portfolio, and fractional forms.
Upvest claims to offer a low-friction infrastructure for new investment propositions. Its API-based system enables real, physical fractional investing in assets like ETFs, stocks, and mutual funds, reducing entry barriers to as little as €1.
Upvest’s API technology benefits both established banks and brokers as well as emerging fintech players such as neo brokers and neo banks. It has also collaborated with distributors to enhance digital investment infrastructure, aiming to reduce costs and complexity and expand geographically.
In June 2022, Upvest closed $42M in a Series B round led by Bessemer Venture Partners. The round also saw participation from Earlybird, ABN AMRO Ventures, Notion Capital, Partech, 10x Group, Speedinvest and Maximilian Tayenthal (N26).
Capital utilisation
Upvest says that the raised capital will strengthen its position as a leader in the Investment API category and will pave the way for profitability.
The company will use the money to enhance its products, support regional expansion, and collaborate with prominent fintech, banking, and wealth management partners. It has already partnered with fintechs such as Revolut and Raisin Bank and digital wealth managers such as Plum.
Martin Kassing, co-founder and CEO of Upvest says, “With this funding, we will be empowered to continue on our mission of making investing as easy as spending money.”
“The funding and partnership with BlackRock enable us to double down on building the leading investment infrastructure and accelerating retail investment adoption in Europe.”
Aim of the partnership
According to a statement, millions of Europeans have embraced investing in recent years, with a growing trend expected in the future. New investment propositions have emerged, offering low-cost and easy access for first-time investors.
ETFs are popular due to their transparency and cost efficiency, particularly in automated monthly investment plans. These plans are expected to increase from 4.9 million in 2021 to around 20 million by 2026 in Europe.
Timo Toenges, Head of iShares EMEA Digital Wealth business at BlackRock says, “BlackRock’s partnership with Upvest will drive innovation in how Europeans access markets and make it cheaper and simpler to start investing.”
“Across Europe, ETFs are at the core of these new propositions and often the default choice for investors, as a transparent, low cost and easily understood starting point for a new generation of investors,” adds Toenges.
This partnership will enable more fintechs, banks, and wealth managers to make investing accessible for their customers.
The collaboration aims to provide trading, settlement, and custody infrastructure for digital wealth management through a single Application Programming Interface (API).
Martin Kassing, co-founder & CEO at Upvest, says, “With only a fraction of the European population investing in stocks and ETFs, we feel the urge to provide a better investment infrastructure to companies facilitating easy and affordable investment experiences.”
“Together with BlackRock’s investment expertise, we can now serve any financial institution to upgrade their investment offering.”
Brief about BlackRock
Founded in 1988 by eight individuals in a single room, BlackRock’s core philosophy is to prioritise clients’ needs and interests. The firm claims to be a global leader in investment, advisory, and risk management services, prioritising fiduciary responsibility to its clients.
BlackRock’s goal is to help millions of people build affordable and accessible savings throughout their lives by simplifying the investing process.
The firm says, “Our purpose is to help more and more people experience financial well-being. Together with our clients, we’re contributing to a more equitable and resilient world – today and for generations to come.”
BlackRock’s investment approach revolves around three core principles. Firstly, understanding the client’s investment objectives thoroughly. Second, striving for the best risk-adjusted returns within the specified mandate. And thirdly, supporting their work with extensive research, data, and analytics.
These principles are also applied rigorously to sustainability and the transition to a low-carbon economy, according to the firm.
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