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How a Munich fintech grew over the past two years

The Mobile Bank N26 had made its first proper financial statements. Then there were the things you wanted to know, quasi one to one in there earnings, costs, cash burn. A little more difficult, the same research now at Scalable Capital. And yet based on various British and German registries, enriched with a few computational exercises, founder scene and believe for the first time to be able to draw a relatively accurate picture of the figures of the largest German Robo-advisors.

The main result at the core

The company has called us on demand a few numbers that are not found in public sources. The main results at the core ,

  • Scalable earns amazingly fast money with new customers
  • Scalable is expected to have generated around 4 million euros in sales in 2018
  • And in the Scalable numbers hides a medium-sized blemish, which so far no one has really discovered

At the beginning of 2017, Scalable Capital had assets under management of € 111 million and € 640 million at the end of the year. Of this amount, around EUR 400 million was attributable to own customers, where Scalable receives 0.55% fees. The remaining approximately 240 million euros came on the mediation of ING Diba to the Munich Robo-Advisor. Because of the revenue splits remain of this only 0.33% at Scalable hang.

On average, the Munich 2017 should have managed about 300 million euros. Since the cooperation with ING Diba did not start until September. For the sake of simplicity, we expect the full 0.55% across all customers. However, VAT is deducted from this, so that Scalable actually generates only around 44.5 cents of net sales from 100 invested euros. With the 300 million euros multiplied, that makes about 1.3 million euros in revenue. This is pretty much in line with the € 1.2 million in revenue that is being discussed in the 2017 deal. The difference would have to be due twice the ING-Diba customer’s shortfall in their bill.

From the 2017 numbers, the 2018 numbers can now be estimated. Even if they are not yet published and Scalable withholds indications here. At the end of last year, Munich was likely to have been assets under management at just over EUR 1.3 billion. Since growth was more evenly distributed over the whole year than in 2017. Or in the first half of the year, growth is likely to have been even greater than in the second half of the year.

This year’s average annual AuMs is expected to be just over € 1 billion. However, as ING Diba customers are already likely to account for 45-50%. They does not expect 0.55% fees any more, but only 0.45%. Respectively, after deduction of VAT. Assets managed at 36 cents per 100 euros. Returns net sales of 3.6 million euros. In addition, Scalable Capital gained its first customers as a white-label provider last year for example, Santander Bank. But too much should not show in the 2018 numbers. That round up generously to 4 million euros in sales.

When the digital asset managers came onto the market a few years ago, the rule of thumb was that a robo provider with 1 billion Euros of assets under management would already have to be profitable. Scalable is likely to be a good distance from the break even though. By the end of 2017, fintech had accumulated a good 14 million euros in losses. Then of which 6-7 million euros in 2017 alone should have been incurred. From the forecasts in the annual reports, Scalable anticipated a similarly high cash burn for 2018. This is not surprising, because the strategy is clearly geared towards growth. This fintech thus maintains an apparatus that is significantly larger than the currently administered sums would justify.

On top of that, reading the financial statements quickly shows that the supposedly flawless success story of Scalable Capital is not without scratches. According to the Companies House i.e. the British Commercial Register, the UK subsidiary only realizes € 65,000 in 2017. This can partly be explained by the fact that Scalable went into the UK later than in Germany at the start and also added the really exciting. Because tax favored  products delayed with the offer. And yet, rather poor compared to the German business earnings are likely to have something to do with the fact that Scalable against the strong domestic competition like Nutmeg and Money Farm. It does much harder than previously known. Especially in 2018, the UK business should have been rather sluggish.

Nevertheless, given the strong market position in the German business, time should play for and not against Munich. Although the acquisition costs from the published financial statements can not be determined exactly. The statements is that, Scalable makes about in bottom line around 140 euros per customer, which sound quite plausible.

Assuming that the average customer had Scalable manage around 35,000 euros at the end of 2018 and multiply that number by the said 0.36% charge. Then one comes to 126 euros, which Fintech earns with one customer per year. In the course of the following year, the acquisition costs have already paid off. And all this against the background that the customer base so far at any rate is growing relatively steadily. So, Scalable starts from year to year from a higher base level.


Wealth management has its peculiarities and difficulties. Correlation to the development of the stock markets, not only in terms of performance, but also the question of how well or poorly new customers are acquiring. However, at the same time, it is a solid and Scalable business when the critical mass is reached. The latter stands out at Scalable Capital despite the slow second half of 2018.

Published inFintech

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