Upvest is set to accelerate its expansion in the UK following a €100m (£83m) Series C funding round lead by Hedosophia.
The German investment API business plans to hire up to 50 more staff in its UK office in a bid to strengthen its position in London.
This comes after the firm received FCA approval in October to become a registered investment company, meaning that UK-based fintechs, banks and wealth managers can now launch and migrate their investment offerings using Upvest’s API.
Managing director and co-founder of Upvest Tobias Auferoth told UKTN: “We are really, really excited to come to what I believe is still the biggest financial market in Europe.
“Nevertheless, the infrastructure is, in parts, quite outdated and so I think that it’s also time for a new provider.”
Founded in 2017, the B2B fintech enables businesses to offer securities to end users and grant them access to fractional ETFs, stocks, mutual funds, and soon derivatives, ELTIFs and bonds in any currency.
It claims to be able to turn businesses into fully fledged brokerages within four weeks due to its three-pillar structure including a tech side, a licensing side and a platform that connects them to the necessary vendors.
Upvest has processed more than 20 million orders on behalf of its clients this year and recently over one million trades per week, making it one of the leading investment infrastructures in Europe.
The funding round, which also included investment from Sapphire Ventures, BlackRock, Notion Capital, Earlybird and more, is going to be used to expand its product suite, double its team of 170 staff and deepen its partnerships with financial institutions.
CEO and co-founder of Upvest Martin Kassing said: “We couldn’t be more excited about the additional capital that will fuel our mission to make investing as easy as spending money.”
Upvest already has impressive clientele including the likes of the UK fintech giant Revolut as well as Raisin, N26 and bunq.
It is now hoping to hire a head of operations, general manager and local compliance, risk and growth teams for its UK subsidiary Upvest Securities Ltd, having already hired a cas officer and a general counsel.
Auferoth has said that most of the new clients in the UK will be already licensed fintechs and neobanks that either have incomplete investment offerings or none at all, and therefore willing to use Upvest technology.
He said: “We think we can replicate the first successes that we’re seeing here on the continent with big clients like Revolut.
“We were clearly personally connected to many of the players in the UK and therefore we got a sense that there is a market in the UK for this as well.”
Several firms including Triple Point, Thought Machine and Revolut, have recently aired their frustrations with engaging with the FCA and expressed bad experiences and delays trying to get approval.
The FCA had an approval rate of just 8% for applications for Electric Money Institution status in 2022, with just 33 approvals made that year.
This was part of an ongoing trend from years previously showing it has become increasingly harder to get approvals from the FCA, which had an approval rate of 90% in 2018 and 47% in 2021.
However, Auferoth told UKTN that Upvest’s process was fairly straight forward, albeit thanks partially to the firm’s experience setting up in Germany and already having relevant documentation.
He said: “We said to ourselves in January ‘no way we will have a license this year’ but we were really positively surprised.
“The FCA was really sticking to its processing timelines which was quite astonishing to us.”
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