Map of Robo Advisors in Europe & Germany
We have been tracking startups in the investment management space ("InvestTech") since 2013. In 2016 we decided to create a map to track the burgeoning robo advisory space. The map is based on TechFluence research of publicly available information, and we are not liable for any errors.
For further information, questions or to propose a startup that should be included in the map: please email info[at]techfluence.eu or reach out via LinkedIn to Michael Mellinghoff.
Scalable Capital develops the robo advice market in Germany and Europe
14.09.2017. | Michael Mellinghoff | MD, TechFluence.
It seems to become a pleasant tradition to update our TechFluence blog whenever milestones happen in the development of the digital wealth market - and very often in the recent past it was linked to Scalable Capital.
They were the first independent robo advisor in Germany who was able to secure a sizeable seed round. Only about a year after going live, the Munich and London based team cracked the €100m mark, doubled it only a few months later, closed a landmark deal with industry giant Siemens, brought in the world's largest asset manager BlackRock as a shareholder including €30m expansion funding. And now ING Diba, Germany's largest direct bank. The first cooperation of a large retail bank in Germany with an independent digital wealth manager - even including co-branding. A fulminant track record!
Today's announcement of a cooperation is remarkable in many ways: ING Diba is not only one of the largest online banks in Germany, but also one of the most agile ones. Those who have witnessed their group CEO Ralph Hamer presenting knows what I mean.
8 million ING Diba clients will now have access to the Scalable Capital offer, which is a win-win for both partners.
As ING Diba has in excess of €130 bn in client deposits it is fair to assume that the interest paid to ECB per month should be around €40m. If only a fraction of their deposits land in Scalable Capital's products, it should help ING Groep's P&L.
On Scalable Capital's side it should help leverage their current assets under management (AuM) of around €350m above the €1bn mark - the question is on which time horizon.
This should bring the startup in the area of a zero burn rate on a monthly basis. London based #roboadvisor Netwealth announced today that they plan to be cashflow positive by 2021 when they want to reach £1,8bn in assets.
Between €1,5bn and €2bn will probably be the benchmark for B2C robo advisors to make their shareholders happy.
In the US only 3 independent robo advisors got across this milestone so far (Betterment, Wealthfront, Personal Capital) and two more gathered around than $1bn: Bloom and FutureAdvisor, although they have not updated their filings since the takeover by BlackRock last year.
In Europe London's Nutmeg is the market leader followed by Scalable Capital and Milan based Moneyfarm. The overall AuM in Europe are €2,1bn according to our own research.
For Germany we estimate AuM to be €875m as of now.
The assets of failed robo Cashboard went to Fintego, the robo advice brand of ebase.
As VisualVest's white label solution "MeinInvest" has been rolled out for the first time (with Sparda Bank Nuremberg) last month we expect a rapid growth of AuM in Germany as soon as other banks from the cooperative banking sector will follow.
The number of robo advice offers in Europe has increased to 87.
Global AuM currently stand at around $200bn. TechFluence estimates to cross the $1trn mark in 2020.
Author: Michael Mellinghoff, written on flight D81001 Stockholm-Rome
#Fintech #RoboAdvisor #wealthmanagement
Map of Robo Advisors in Europe (as of 15.06.2017)
Map of Robo Advisors in Germany (updated 15.06.2017).
Updates / Blogs
Robo Advice in Germany – a summer update
10.08.2017. | Michael Mellinghoff | MD, TechFluence.
Comdirect, the listed subsidiary of Commerzbank, recently announced that it collected in excess of €100m in their newly launched robo advice solution labelled Cominvest.
TechFluence took the opportunity to focus on the German robo advice scene including an assessment of the assets under management in Germany.
8 new robo advice offers in Germany, mostly with corporate background
Germany remains by far the market in Europe with the highest number of robo advisors and robo advice offerings. As of beginning August, there are currently 31 robo advice offers in Germany (UK: 19 players, + 1) in the retail and the B2B space. This is 8 more than in December 2016 and accounts for new entrants like Bevestor, Deutsche Wertpapiertreuhand, Elinvar, Monviso or Solidvest and the insolvency of Cashboard.**
Most of the new entrants have a corporate background, i.e. are owned or run by a bank, insurance or an asset or wealth manager. With their typically higher overall fixed costs comes the need for higher fees: Cominvest (0,125% p.m.= 1,5% p.a.) and VisualVest (0,05% p.m. = 0,6% p.a.) both market their products with their monthly costs in percent , which makes them look fairly advantageous, but in reality they are equally expensive as some of their peers: Bevestor (0,9% p.a.) or Solidvest (1,1% to 1,4% p.a.).
Robos with actively managed funds as underlying bear high costs
In the cases of Bevestor, Cominvest or VisualVest the costs of the underlying fund structures (ETFs, actively managed funds) must be taken into consideration, which depends on the selected portfolio. In all cases when actively managed funds are allocated the total expense ratio (TER) is near or clearly north of 2% - i.e. on the cost level of many actively managed funds. In the Solidvest case the management fee level mentioned above equals the TER as the fund invests in stocks or bonds only, not in funds.
However, compared to many independent robo advisors in Germany these TER levels are very high: Ginmon, LIQID, Scalable Capital or Whitebox offer TER ratios which are around half depending on the chosen strategy, investment amount and whether active funds are allocated or not. Among the corporate robo advisors Fintego stands out with a very attractive pricing offer of 0,45% p.a. for their managed account with ETFs.
Assets under management
In terms of assets under management (AuM) market leader in Germany remains Scalable Capital, who as of end of July 2017 accumulated more than €300m, which means they collected an impressive €200m since December 2016. This makes Scalable Capital number 2 in Europe after UK based nutmeg (~ €700m) and just before Italian robo Moneyfarm (~ €290m).
Runner up in Germany is LIQID, who TechFluence estimates at €130m, followed by Whitebox with estimated €60m in assets. Quirion, Growney, Cominvest, Easyfolio, Investify, Fintego and Ginmon complete the top 10 by AuM.
At Comdirect’s Cominvest offer clients have a choice: they can opt for the automated investment solution or choose to make self-directed investment decisions. As comdirect itself traditionally is a securities broker for self-directed clients, we estimate that less than half of the assets announced are in the real robo advice solution and estimate the Cominvest robo assets to be less than €50m.
AuM in Germany
The overall assets under management in Germany we assume to be around €850m as of end of July 2017. However, as some big players have entered the scene recently, we expect robo advice to get more attention and traction. Like in the USA, we expect higher growth of robos backed by incumbents, but a handful of robo advice startups will have a chance to grow significantly and become a relevant market participant in future – if the founders resist acquisition offers from incumbent players.
We expect more cooperations between independent robos and corporate players in future as well as a price battle in this sector. Based on the latest market entries we continue to believe that the number of robo advice offers will multiply to 500 in 5 years. More than certain a consolidation in the B2C space is inevitable, too. On the B2B side we expect an oligopolistic market structure to emerge.
** However the two numbers are not directly comparable as for this comparison we counted the robo advice offers, not the robo advisor companies itself. For example Vaamo and SINA are counted as two product offers here, while in the past only Vaamo was included in our robo maps.
For any questions please reach out to info[at]techfluence.eu
Scalable Capital moves to a new level with BlackRock as a new shareholder
19.06.2017. | Michael Mellinghoff | MD, TechFluence.
On 19th June 2017 German business daily HANDELSBLATT broke the news that BlackRock joins a €30m funding round of German market leader in "Robo Advice" Scalable Capital, headquartered in Munich.
Scalable Capital currently manages €250m+ in assets of 6000+ private clients predominantly in Germany, Austria and UK.
In December 2016 Scalable Capital announced the milestone of crossing the €100m in assets, in March 2017 they announced €200m. A cooperation agreement with German industry giant Siemens has certainly fuelled their asset growth.
With BlackRock - the world's largest asset manager - as a new minority shareholder Scalable Capital accepted their first strategic shareholder. This should help them overcome the biggest challenge of independent wealth managers to acquire more assets: the lack of reputation and credibility of a startup.
Scalable Capital co-founder Erik Podzuweit comments:
"BlackRock and us share a vision: technology-based investing is the future. It makes investing better, cheaper and accessible to more people."
London remains the European robo advice capital
As the TechFluence robo map reveals, currently there are 73 robo advisors in Europe. 26 of them in Germany, followed by 19 in the U.K. and 6 in Switzerland. The map shows B2C and B2B oriented firms, who either manage assets for clients (B2C) or support this business model (B2B).
16 robos are headquartered in London (+1). In Germany, Frankfurt counts 10 robos (+2), Munich 5 (+1), Berlin 4 (-1).
Market trends Robo Advice
Almost all players who entered the German speaking area since December 2016 are retail oriented robo advisors:
Bevestor (DEKA Bank group, Frankfurt), Moomoc (Vienna), SimpleWealth (Zurich), SolidVest (wealth manager DJE Capital, Munich).
This contradicts a trend witnessed in the B2C space, where the majority of players either talk about extending the business model towards B2B or already entered cooperations (for example Vaamo).
Scalable Capital was not the only player with noteworthy growth: Berlin based digital wealth manager LIQID Investments surpassed the €100m mark in spring 2017.
The first half of 2017 also saw local M&A activity in Europe: Dutch robo advisor Pritle was acquired by Dutch digital bank Binck.
As digital wealth managers undercut traditional players massively on price TechFluence expects medium term a significant increase of product offers in Europe in the Robo Advice universe from banks, insurances, asset and wealth managers as well as market entries from non financial segments (retail, media etc) with strong brands. We stick to our estimation of the number of product offers to rise from currently around 100 to 500.
First examples can be seen already (cominvest by comdirectbank). One B2B player recently during a panel discussion mentioned that they currently build 12 robo advisors for clients.
For question please contact info[at]techfluence.eu
Number of robo advisors in Europe increases by 10%; one third in Germany
02.05.2017. | Michael Mellinghoff | MD, TechFluence.
TechFluence research shows that as of end of April 2017 there are 73 Robo advisors in Europe (refer map below).
More than a third of them are based in Germany (26), followed by 19 in UK and 5 in Switzerland.
The hub with the highest number of provider's in Europe is London (16), also home to Europe's largest digital wealth manager nutmeg with estimated £700m in assets under management.
Germany's robo headquarter is Frankfurt with 9 players based here, while Berlin and Munich count 5 each. We assume that Berlin has the highest number of robo advice startups in stealth mode in Germany, currently confirmed is one. However, recent FinTech Germany Award winner LIQID from Berlin announced a Frankfurt office recently.
Further European centers are Paris and Zurich with 4 players each.
All new market entrants prefer retail business
Compared to half a year ago the number of robos in Europe has risen by more than 10%. All new entries 3rd Eyes (Switzerland), Berries (Germany), Euclidea (Italy), Finizens (Spain), moola (UK), moomoc (Austria), Munnypot (UK), SimpleWealth (Switzerland) as well as Solidvest (Germany) offer their services private investors (D2C, B2C) and were founded across Europe, while a key trend of existing players is to widen their B2C service offers towards B2B.
The TechFluence survey focuses on independent robo advice firms or players where robo advice forms a significant part of the strategy for example in a separate brand like Fintego (Commerzbank group) or VisualVest (Union Investment).
Not included are robo advice offers from large incumbents where automated solutions only form a product. If one would include these the overall number (robo advisors plus robo advice offers) would exceed 120+ depending on the counting pattern.
500 robo offers in 5 years expected
Currently a very high number of markt participants prepare a robo advice offer or their market entry, for example Canadian robo firm WealthSimple has hired a European CEO. Market entry is expected latest in autumn 2017.
On 30th of April news spread that Munich based €11bn wealth manager DJE Kapital launches Solidvest, a digital wealth manager investing in stocks.
Based on this research TechFluence continues to feel comfortable with its market expectation of around 500 robo advice offers in Europe in about 5 year time. Market entries will be seen from all areas of financial services, particularly but not limited to: banks, asset managers, wealth managers, insurance providers as well as from the non-financial sector.
Partially this will also be part of a beginning vertical integration in FinTech.
In India for example a payment company has entered the robo advice space.
For any questions please contact info(at)techfluence.eu
64 robo advisors in Europe – five cracked the €100m euro mark (refer map below)
06.12.2016. | Michael Mellinghoff | MD, TechFluence.
Digital wealth management – coined “Robo Advice” although none of the market participants seems to like this term – is one of the Fintech sectors that needs patience. Patience from all stakeholders: the founders, the team, the clients, the providers – and most importantly the investors.
Reason for this is, that trust as well as track record do not build overnight. From decades long experience in the traditional investment management world, we know that a fund typically starts selling once there is minimum of 3 year’s track record. 3 years is ages in the digital world. Hardly any of the current European players have such a long track record.
Thus it is not surprising that the assets under management globally are only just above $60bn and the majority was collected by traditional houses in the US (as they already built trust in the past). In Europe (including UK) there are currently 64 robo advice firms rendering or preparing their services – and counting!
The epicenter of robo advice in Europe is London. 15 of the 18 firms registered in the UK are there. In Germany there are more robos (23 firms), but spread all over Germany with highest concentration in Frankfurt (8), Berlin (4), Munich (4). Zurich and Paris account for 4 robo advisors each.
These figures include B2B and B2C business models, which offer services that automate either the advisory or the portfolio management approach.
An analysis of assets under management in Europe is very difficult, as hardly any firm publishes them yet.
In terms of assets under management* (assets under control / assets under administration respectively) Spain’s Feelcapital is the biggest European player (around €1bn), but it seems that a big chunk of the assets stem from analog times.
So the digital AuM crown in Europe goes to Nutmeg in the UK, who we estimate around €650m in AuM followed by three players who crossed the €100m milestone: CheBanca (Mediobanca group) as well as startup Moneyfarm, both from Italy and Pritle from the Netherlands.
TechFluence expects more players in Europe to cross the €100m mark soon, especially in Germany where the competition is fierce but the potential is huge.
Compared to the overall number of banks targeting assets, the overall number of “Robos” is still tiny. Although they all struggle in collecting assets and thus suffer from high customer acquisition costs it has to be said that also big (analog) investment management firms needed many years to gain relevance after they were set up in the 20th century.
The advantages of digital investment services for investors in terms of services and costs are so convincing that we expect significant long term growth in terms of number of market players as well as assets under management, especially when relatively new technologies become available (AI, VR etc.)
The low interest rates we currently see globally fuel the robo advice sector. The low interest rates make it more difficult for asset managers to “hide” the high management and transaction fees. If a market yield for government bonds is 5% a total expense ratio (TER) of a fund of for example 1,5% does not hurt as much as if the nominal yield is 0,5%. The high costs of the analog investment world simply becomes more transparent in times of zero interest rates.
In many discussions we had in the selection process for our event series since 2013 FinTech Forum (www.fintechforum.de) it became clear that robo advisors very often experience not only larger average investment sums than expected, but also significant investments from single investors, often 6 or 7 digits. Our experiences from European players were confirmed by international panelists in a recent conference on robo advice in Bahrain, which we participated in.
This proves that also clients in the private banking segment are attracted by robo advice models. This is not surprising as this clientele has the knowledge and experience to understand the impact of investment management costs on performance. In our view it will only be a matter of a small number of years until robo advice will become an accepted market standard for the management of liquid assets. There are business models competing with private banks or wealth managers here but also business models who strive to support the wealth advisor in his challenge to digitize a service which was initially built solely on inter human trust.
*figures based on publicly available sources and the data supplied by the mentioned firms
For the list of the mentioned firms (or missing robo advisors) please contact TechFluence: info[at]techfluence.eu
Tags: #Robo Advice, #RoboAdvisory, #Fintech, #WealthManagement, #digital
Revealed: Scalable Capital's assets under management grow above €100m !
14.12.2016. | Michael Mellinghoff | MD, TechFluence.
Scalable Capital is one of FinTech Forum's 220+ startup alumni, who had been selected to pitch at one of our 12 events so far since 2013.
Scalable debuted on our first edition of FinTech Forum On Tour | InvestTech in London in September 2015. It was their first stage appearance as a startup at all, as we found out later. Just before this Scalable Capital closed their seed round silently and very successfully.
Since the dual start in two European core markets Germany and UK (with Germany being a few months ahead as the licensing process was faster there) Scalable has been one of the most active digital wealth managers in Europe with a lot of visibility in the market.
Today co-founder Erik Podzuweit revealed, that their assets under management grew above €100m, being the first German robo advisor to achieve this. Erik said "We are delighted to reach this important milestone in our first year of doing business and have great ambitions for the years to come."
In our view this is further prove that automated investment advice is here to stay. This amount was collected in only a bit more than one year - without a well known brand in the background !
Scalable now joins the exclusive €100m club next to CheBanca (I), a spinoff of Mediobanca, FeelCapital (E), Moneyfarm (I), Nutmeg (GB) and Pritle (NL).
In the more mature US robo advice market 3 startups already manage assets above the $1bn mark: Betterment $6.1bn, Personal Capital $2.8bn and Wealthfront $4.4bn.
The way we have got to know the Scalable Capital team we are more than certain that they will have this as their next target and will achieve this, too.
Top job, Scalable !
German RoboAdvice arena sees interesting market entry from incumbent
07.03.2016 | Michael Mellinghoff | MD, TechFluence.
On 7th of March 2016 the first German asset management company entered the Robo Advice arena. Union Investment, one of Germany’s biggest players sent VisualVest live. VisualVest was developed as a corporate startup and first online impressions prove that it combines a startup look & feel with high quality.
VisualVest offers retail investors access to more than 13.000 investment funds via 14 different portfolios, so called VestFolios. Investors can choose between ETF based portfolios and actively managed funds. Charges seem moderate: 0,05% per month, which equals around 0,60% p.a. Minimum price per month is 3€. The fund costs are to be added. The historic total expense ratio (TER) for each VestFolio is displayed during the customer journey.
VisualVest is the first independent move of one of the established institutions into the Robo Advisory arena in Germany. After a number of startups have entered this space – many of them have been on our FinTech Forum stage like Cashboard, Niiio, Scalable Capital, Vaamo etc – a few incumbents reacted already:
Commerzbank’s subsidiary ebase built FinTego, comdirect offers automated portfolio advice. Deutsche Bank entered a cooperation with FinTech Forum alumnus FinCite to offer their maxblue AnlageFinder. The very first “robo” corporate startup in Germany was quirion, a spin off of challenger bank Quirin Bank, who specialize in fee based advice.
VisualVest’s move proves TechFluence assumption that Germany is one of the hottest markets for Robo Advice offers. Due to the history of the market, the many direct banks and brokerages, German retails clients and investors got accustomed to trust new market players more than in other European markets, especially when they offered products for price sensitive clients.
@Mellinghoff is Managing Director of TechFluence, Senior Advisor to FinTech Forum , Mentor at Level39 and Startupbootcamp Fintech as well as author of various articles on #Fintech related topics
Meet Europe's Leading Startups Transforming Investment Management
03.09.2015 | Samarth Shekhar | MD, TechFluence
We all know the Paul Graham adage: "you only need two kinds of people to create a technology hub: rich people and nerds."
Having spent the last few months in the hot pursuit of startups in the asset & wealth management space with Michael Mellinghoff, it would seem "you just need nerds to create rich people, technology hub or not!"
We had a hunch there was a hidden InvestTech scene in (continental) Europe when we wrote this post over a month ago: beyond the startups you kept bumping into in London. Now we know for sure.
The startups selected to present at the FTF On Tour | InvestTech event (25th Sep. in London) come from Italy, Israel, Germany, Austria, Switzerland, Poland, France and the UK.
They span robo advisory / digital wealth management, social trading, sentiment analysis and algorithmic trading, all the way to bitcoin derivatives trading and web-based valuation using big data, AI & swarm intelligence.
There are players aiming the tech gun to crack challenges like risk management, tracking financial institutions' social media for compliance, or getting a unified view of exposures across complex datasets using graph database technology.
Finally, there are startups offering "algo-as-a-service", a factory and marketplace for financial services firms, as well as infrastructure and market data from the cloud.
Check out the complete line-up here or reach out to us @FinTechForum_DE to request an invitation.
Venture capital discovers German early stage InvestTech #Startups
20.08.2015 | Michael Mellinghoff | MD, TechFluence.
In the past few months German startups in the investment universe (hence InvestTech) were able to secure multi million funding rounds.
Berlin based robo advisor Cashboard (www.cashboard.de) started off with a buyout of its crowd investors, offering a premium of 48% on the invested capital. Not a bad deal for a 2 year investment. Hence, 70% of the investors grabbed that offer.
Cashboard financed the €500k buy back with their seed round of €2m injected by Earlybird, Heilemann Ventures, Redalpine, Bigpoint founder and business angel Heiko Hubertz as well as iconic Valley accelerator 500Startups.
According to founder Robert Henker, the funds will be invested in growth. One focus initiative being the €4m TV budget which the #startup was able to secure by winning a pitch challenge of Pro7/Sat1 – the German biggest private media giant – at NOAH conference last year in London. The TV spot will kick off in autumn.
Next in line was Scalable Capital (www.scalable.capital), a Munich and London based FinTech startup, that was in #stealth mode until recently and silently secured €4m in 2 seed rounds since beginning of the year from Monk’s Hill Ventures, German Startups Group, Epic founder Mato Peric, business angels Reiner Mauch, Rahul Mehta/DST and ex-KKR manager Steffen Pauls. Lead investor is Holtzbrinck Ventures.
The 5 founders, 4 ex-Goldman Sachs and a professor of financial econometrics from the University of Munich, will launch a digital asset manager for private investors in autumn, which uses a proprietary risk-management technology for long term systematic wealth creation. Founder Erik Podzuweit: “Services of this kind are commonly only available to large institutional investors”.
Scalable Capital will start fully licensed from German watchdog BaFin right from the start, which is unusual for FinTech startups in Germany. Most cooperate with banks to obtain a license or use a liability umbrella.
The latest funding announcement from the small but growing German InvestTech scene came from Cologne based moneymeets (www.moneymeets.com ), who collected €3.5m investment from Swiss asset management boutique Woodman and existing investors, DvH Ventures and 2 family offices.
Moneymeets provides a community platform for investors, that makes fees completely transparent, aggregates investors accounts and insurances with various banks/insurances and enables investors to interact and transact their portfolio holdings. In addition the moneymeets platform returns retrocessions to its community member. As a next step moneymeets with its transparency approach will provide portfolio management solutions.
These 3 impressive early stage funding rounds prove, that FinTech in Germany is decentral, the InvestTech space has a strong potential in the view of various high level national and international investors. It confirms Techfluence’ assumption, that this field is a future growth area. We assume that the number of automated advisory offerings is going to grow tenfold in the next few years.
Event notification: Scalable Capital and Cashboard as well as many other InvestTech startups will pitch their company during the FinTechForum on tour | InvestTech in London on 25th of September 2015. www.fintechforum.de/London
FinTech? It is high time for InvestTech!
31.07.2015 | Samarth Shekhar | MD, TechFluence.
I started the year tasked by one of our sponsors to identify (European) startups transforming the investment management space.
Having spent the first three months visiting nearly every FinTech event in the region and giving away a few thousand euros, I was up to speed on every payment, lending, mobile banking, remittance and bitcoin startup lurking in the dark cobblestoned streets of European FinTech.
Apart from what we heard from our US friends and some of the initial rumblings in London that started last year, Continental Europe was under the radar.
However, nearly 1/3rd of the presenting startups at the first four FinTech Forum events were in the investments and capital markets space. Michael Mellinghoff - who had pitched his (then) InvestTech startup sharewise.com at our first event in 2013 - had been scouring this space since the exit of sharewise in end of 2013. We also got to know some interesting players on Efi's InvestTech blogs on Daily FinTech.
Much like the Aha! moment in 2013 - when there was no semblance of a FinTech scene in Continental Europe (resulting in FinTech Forum) - Rafiki said "It is time" again. And we heard him- again!
FinTech Forum On Tour | InvestTech goes to London on 25th Sep. 2015, with 20 startups in Continental Europe transforming asset management, wealth management and private banking who will have the chance to present to ca. 40-50 investors and financial institutions.
If you are a startup in Continental Europe focused on next-generation investment management, automated advisory, social trading, algorithmic trading etc. and would like to apply for a place, we need to hear from you no later than 14th July, 2015.
If you are a financial institution, VC or investor interested in this space and would like to get involved as a sponsor, mentor or partner, please connect to us:
Michael Mellinghoff Twitter: @mellinghoff
Samarth Shekhar Twitter: @techfluence_eu
More about the initiative here: http://www.fintechforum.de/london/
FinTech Forum on Tour | InvestTech is an invitation-only initiative run by our sector experts to support promising “InvestTech” Startups in (Continental) Europe, together with leading investors, financial institutions, mentors etc. comprising:
- An exclusive event (60-70 participants) on 25th Sep. 2015 in London.
- Mentoring for selected startups
- The 1st Global InvestTech Survey (covering 200+ Startups)
- The chance to win free working space in the heart of London’s FinTech hub.