Upvest, a Berlin-based fintech company providing the trading, settlement and custody infrastructure necessary for digital wealth management in one application programming interface (API), is partnering with BlackRock to make investing more accessible.
Partnership to complement strengths
BlackRock’s broad asset management expertise and leadership in ETFs combined with Upvest’s efficient investment API can power investment offerings for millions of investors. Wealth managers, banks and fintechs can build modern investment experiences in months instead of years, relying on Upvest’s efficient, low-friction API based infrastructure offering. Upvest’s offering will remain an open architecture.
As part of the partnership, BlackRock participated in Upvest’s €30m 2023 funding round alongside Upvest’s existing investors Bessemer Venture Partners, HV Capital, Earlybird, Notion Capital, ABN Amro Ventures, and 10x Capital.
Retail investment revolution in Europe
Millions of Europeans have embraced investing over the past years with many more expected to participate in financial markets in the years ahead. New propositions have emerged allowing low-cost, low-friction access for a new generation of first-time investors. ETFs are often at the heart of these new investors’ portfolios, offering transparency and cost efficiency. ETF savings plans (automated monthly investment plans) have fuelled a big part of this growth and are expected to grow in number from 4.9 million in 2021 to roughly 20 million by 2026 across Europe.
The importance of efficient infrastructure
These new investment propositions, with many powered by Upvest, can benefit from efficient, low-friction infrastructure to reduce transaction costs and allow access from small investment amounts, enabled by innovations such as fractional dealing of ETFs and stocks. Both fintechs, such as neo brokers and neo banks, and established banks and brokers can benefit from these capabilities to power their offerings.
Upvest is a leader in this space, having won some of Europe’s largest fintechs as clients. Upvest’s API-based investment infrastructure enables real, physical fractional investing across ETFs, stocks and mutual funds, lowering the entry barriers for investments to as little as €1 in any asset class. The growth of ETF portfolio adoption in retail can also be supported by Upvest’s capabilities with the help of its in-house portfolio engine and re-balancing. The new wave of investors may evolve from single product investments to broader portfolio adoption as education and investor objectives evolve. Upvest collaborates with distributors looking to evolve their digital investment infrastructure to reduce cost and complexity or expand geographically.
Timo Toenges, Head of iShares EMEA Digital Wealth business at BlackRock, comments:
“Millions of Europeans are embracing investing for the first time to build a better financial future for themselves. 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.”
Martin Kassing, Co-founder and CEO at Upvest, adds:
“One of the world’s leading providers of investments meets leading European investment infrastructure. We are incredibly proud of this partnership as a way to increase investment adoption for millions of people. 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.”