Scalable Capital raises $58M at a $460M valuation for its robo-investment platform – TechCrunch

Scalable Capital raises $58M at a $460M valuation for its robo-investment platform – TechCrunch

Startups building tech-based platforms to help make investments continue to be in high demand, building on an expanding market of investors getting more confident to rely on technology to undercut broker fees and speed up the process. Today, one of the hopefuls in the space is announcing a growth round to capitalise on that opportunity. […] Expectant mothers who lived near flaring sites had higher odds of giving birth prematurely than those who did not, researchers found. The adverse outcomes fell entirely on Hispanic women. NEW YORK >> President Donald Trump may be losing, but that doesn’t mean Joe Biden is winning. Deciding whether or not to sell your company stock (or when to sell it) is not a decision to enter into lightly.

Startups building tech-based platforms to help make investments continue to be in high demand, building on an expanding market of investors getting more confident to rely on technology to undercut broker fees and speed up the process. Today, one of the hopefuls in the space is announcing a growth round to capitalise on that opportunity.

Scalable Capital — the Munich-based startup that has built a platform to monitor and manage investment portfolios investing in shares, manage trades and exchange traded funds for a flat fee of €2.99 per month — has closed a round of €50 million ($58 million) to expand its business. Scalable currently has some 80,000 customers across Germany, Austria and the UK. Using its services both directly and via bank partners, the startup says it has more than $2 billion under management on its platform and the plan is to build more products for those customers, add more customers in those regions and potentially look to more countries in Europe.

CEO Erik Podzuweit confirmed to TechCrunch that the Series D was made at a post-money valuation €400 million ($460 million).

The investment is coming from a mix of new and existing investors, including BlackRock, HV Holtzbrinck Ventures and Tengelmann Ventures. It brings the total raised by the startup to €116 million ($133 million).

The last several years have seen a veritable explosion of startups — and banks, often tapping technology built by startups, as is the case with Scalable — building financial technology tools that help people bypass slow, costly and often less-transparent legacy banking services. In place of the incumbents, startups are developing apps and web-based platforms to help users make faster, cheaper and (critically) more financial transactions.

That trend has been accelerated significantly in the last few months, where people are spending a lot more time in front of screens at home as part of social distancing orders to contain the spread of the novel coronavirus. Services that used to be conducted in person are shifting to being carried out online: That was already a trend before the health pandemic, of course, but now with more limited options, people are making the shift faster.

It seems that this is even the case in the world of investing apps.

Despite the wider economic downturn spurred by the global health pandemic, those who have the money to make investments are still doing so, not just to capture new opportunities that are arising, but also to move away from investments that might be less fruitful in the current climate.

It seems ironic for a startup to set out to “democratise” services for wealth management — one way that Scalable likes to describe its service — considering that wealth management is not something that the majority of people will ever have the means to need to think about, but the trend seems to play out at all levels of the economy.

And that means startups are raising money to meet that demand to disrupt traditional brokers. One of Scalable’s direct competitors, Trade Republic, announced a fundraise of $67 million just in April. Others in the same space that are also on the radar of VCs include Bux, YieldStreet (out of the U.S.), Parallel Markets, Freetrade, Revolut and Robinhood.

“In times of Covid-19, our funding round is a powerful signal; it shows that our focused, digital business model is convincing the investors,” Podzuweit, co-founder and co-CEO of Scalable Capital, said in a statement.

To date, Scalable has built out its business as both a B2B and B2C service. For the former, it sells its tech to banks who want to offer a “robo advisor” option to its investor customers. Partners in that business include a mix of huge banks and other startups, among them Barclays, Gerd Kommer Capital, Raiffeisen Banking Group Austria, Raisin, ING Deutschland, Siemens Private Finance, the Openbank digital bank from Santander, Targobank from French Crédit Mutuel, Oskar and Baader Bank.

The B2C service, which was only launched in June, offers a service directly to investors themselves. It sounds like it has been growing very quickly in the month or so it’s been in the market. In an email exchange, Podzuweit — who co-founded the company in 2014 with Florian Prucker, Adam French (previously at Goldman Sachs) and Professor Dr. Stefan Mittnik (an academic who is the current chair of Financial Econometrics and director of the Center for Quantitative Risk Analysis at the Ludwig Maximilian University in Munich) — said that the B2C and B2B businesses are roughly at a 50/50 rate in terms of revenues at the moment.

The B2C service includes a robo advisor for private investors with an “own asset management strategy.” The service branded “Prime Broker” offers flat-rate trades, and Scalable says that on average users of it service are about 10 years younger than those for its wealth management service (no surprise there, since it’s likely that older people who have accrued more wealth will be the most likely targets for something aimed at “wealth management”).

And that underscores the opportunity for growth into new customer segments that Scalable wants to target with this funding.


Author: Ingrid Lunden

1 day

Study Links Gas Flares to Preterm Births, With Hispanic Women at High Risk

Study Links Gas Flares to Preterm Births, With Hispanic Women at High Risk

Expectant mothers who lived near flaring sites had higher odds of giving birth prematurely than those who did not, researchers found. The adverse outcomes fell entirely on Hispanic women.

Across the United States, gas flares light the night skies over oil and gas fields — visible symbols of the country’s energy boom. They also emit greenhouse gases, making them symbols of climate change that many environmental groups would like to see snuffed out.

Now, a new study points to another problem: Pregnant women who lived near areas where flaring is common had 50 percent greater odds of giving birth prematurely than those who did not. These births occurred before 37 weeks of gestation, when incomplete development raises a baby’s chance of numerous disorders, even death.

“It’s on par with the increased risk you see for women who smoke,” said Lara Cushing, an assistant professor of environmental health sciences at the University of California, Los Angeles, and lead author of the study. Unlike smoking, however, “it’s not really something you can do much about on an individual level,” she said.

The analysis also found that the impacts of flaring fell entirely on Hispanic mothers, raising concerns about environmental injustice at a time when questions of racial inequality have gripped the nation.

Past research has shown that living near oil and gas wells increases the odds of adverse birth outcomes. The study, published last week in Environmental Health Perspectives, is the first to look specifically at flaring.

Oil and gas producers flare natural gas when it is too abundant to capture and sell, or when low prices make doing so unprofitable. Burning the gas prevents methane, a potent greenhouse gas, from escaping to the atmosphere, but it still releases planet-warming carbon dioxide and other harmful chemicals.

Dr. Cushing and her colleagues analyzed satellite images to track nightly flare activity across the Eagle Ford Shale in Texas, which can be seen from space as a crescent of twinkling lights between Laredo and San Antonio. In an earlier study, the researchers counted 43,000 flares between 2012 and 2016.

Over that same period, women in the region gave birth to 23,500 babies. The study found that the odds of preterm birth were 30 percent higher for mothers who lived within three miles of an oil and gas well compared with those who did not, and 50 percent higher for women who were exposed to 10 or more flares over the course of their pregnancies.

It can be hard to tease out cause and effect in retrospective studies such as this, said Dr. Heather Burris, a neonatologist at the University of Pennsylvania’s Perelman School of Medicine who was not involved in the work. But Dr. Burris said the researchers did their best to rule out factors that might make some women prone to preterm birth, like age, smoking habits, socioeconomic status and access to prenatal care.

The Texas Oil and Gas Association did not respond to requests for comment.

Scientists do not know exactly why some women give birth prematurely, Dr. Burris said. But the new study adds to growing evidence that environmental factors play an important role.

In the case of flaring, researchers say the mechanism may involve particulate matter, volatile organic compounds and other toxic substances. “It seems pretty plausible that it would have an effect on premature birth given that air pollution and preterm birth are well linked,” said Elaine Hill, a health economist at the University of Rochester Medical Center who was not involved in the study.

The results highlight stark racial disparities in environmental health because the connection between flaring and preterm birth only emerged among Hispanic women, who made up a majority of the study population. Flaring did not increase the risk of preterm birth for non-Hispanic white women, who accounted for about a third of mothers in the study.

Dr. Cushing said there are several potential explanations. On average, Hispanic women experienced more flaring, and it’s possible that the effects only manifest above a certain threshold of exposure. Other studies have also shown that women of color are more susceptible to pollution. That may be because their bodies are already worn down by longtime health problems, exposure to other contaminants or chronic stress caused by discrimination, Dr. Cushing said.

Although the study didn’t address it, economics could also provide part of the answer, Dr. Hill said. If white women in the study were more likely to own land, and thus mineral rights, then the income bumps they received from oil and gas extraction could have offset negative health effects, she said.

Whatever the reason, Dr. Burris said the study suggests that flaring poses a danger to expectant mothers. “I wouldn’t go as far as to say that it’s safe for some women and not others,” she said. “No way.”

Flaring has increased in the U.S. in recent years, but there are efforts to curb the practice. Last week, a federal court blocked the Trump administration’s attempt to roll back Obama-era regulations that discouraged flaring. The Texas Railroad Commission, which oversees the state’s oil and gas industry, is also considering tightening flaring regulations.

Diana Lopez, executive director of the Southwest Workers Union in San Antonio, which advocates for environmental justice, said she hoped the study would bring new urgency to the issue by showing how vulnerable populations bear the collateral costs of fossil fuel extraction.

“That’s just a classic example of environmental racism,” she said.


Author: Julia Rosen

Democratic group looks to close Trump-Biden enthusiasm gap

Democratic group looks to close Trump-Biden enthusiasm gap

NEW YORK >> President Donald Trump may be losing, but that doesn’t mean Joe Biden is winning.

At least that’s the concern of a pro-Democrat super PAC embracing a new strategy backed by $15 million in online ads to help close the nagging enthusiasm gap between the Republican president and his Democratic challenger.

The strategist leading the super PAC known as PACRONYM warns that Biden is leading many polls “by default” and may lose his advantage unless Democrats give key groups of voters better reasons to get excited about their nominee.

“We really think that Biden’s enthusiasm gap could be a vulnerability,” said PACRONYM founder and CEO Tara McGowan.

Beginning in August, the group and its sister nonprofit will begin pumping millions of dollars into online ads targeting a group of roughly 1.7 million “low-information” left-leaning voters — largely women of color under 35 — spread across Michigan, Pennsylvania, Wisconsin, North Carolina, Arizona and Georgia who don’t know much about Biden and probably wouldn’t turn out to vote without a push. The strategy represents a significant shift away from a broader group of “persuadable” voters in swing states who have been the overwhelming focus of more traditional political groups.

Recent polls suggest that much of Biden’s support comes from a coalition of voters united far more by their disdain for Trump than their affinity for Biden. There is also agreement between the campaigns that many voters don’t know Biden or his plans very well, despite his lifetime in Washington.

Biden’s team has largely dismissed the issue, pointing to the intensity with which many voters oppose Trump. But sensing opportunity, Trump’s campaign has been flooding swing states with anti-Biden attack ads trying to can scare away would-be Biden supporters or at least persuade them not to vote at all.

Democratic strategist David Plouffe, who served as campaign manager for President Barack Obama, said it was difficult even for Obama to persuade some lower-information voters of color to show up for the nation’s first Black president. It will be harder for Biden, Plouffe suggested, even though Biden served as Obama’s vice president for eight years.

“A lot of the swing voters that are now in Biden’s column, they aren’t voting for him because they think he’s going to be on Mount Rushmore,” said Plouffe, who sits on PACRONYM’s board. “They’re voting for him because they’re sick and tired of Trump and they think Biden is a fine alternative.”

“These voters are hard to reach, hard to turn out,” Plouffe added. “And with (Obama), there was a little more excitement.”

The super PAC’s effort will target low-information voters on platforms like Instagram, Snapchat, Hulu and even gaming devices.

While the specific ads have not yet been created, they’re likely to acknowledge the voters’ skepticism about Biden and use celebrities, actors or musicians to highlight his plans to address issues like climate change and college debt, McGowan said.

“A lot of these voters, if they voted in the primary, Joe Biden likely wasn’t their first or second or even third choice,” she said.

“A lot of voters don’t know he would be the most progressive president in history based on his positions,” McGowan continued. “They don’t know much about Joe Biden aside from him being Obama’s vice president. That’s not enough for them.”

While PACRONYM’s investment is significant, it’s not the only political group working to energize voters of color. Another super PAC, Priorities USA, recently announced a $24 million digital advertising campaign along with Color of Change aimed at energizing Black men and women across some of the same swing states.

Priorities chair Guy Cecil said last week that his group projects Biden would lose his advantage over Trump if his support from white working-class voters dropped by 5 percentage points and turnout among voters of color dropped by just 2 points.

“While the numbers certainly have been encouraging for Democrats, we are not done,” Cecil said.

Meanwhile, the Biden campaign, which isn’t legally allowed to coordinate with super PACs, announced plans on Tuesday to spend $15 million in the next week alone on a TV, radio, online and print advertising blitz across at least six battleground states.

While Trump has focused on attacking Biden, the new Biden ads highlight what the campaign calls “Biden’s trusted and tested experience during times of crises” and make the “positive case for Joe Biden’s leadership and his vision for his presidency.”


Author: By Steve Peoples / Associated Press

What you need to know before selling your company’s stock – TechCrunch

What you need to know before selling your company’s stock – TechCrunch

More posts by this contributor

In a recent article, I covered all of the reasons you might be tempted to hold a highly concentrated position in your company stock as a tech founder and how it fits into your portfolio. I then followed up with a rundown on why resisting diversification is generally a bad idea and the subconscious biases that hold us back from selling.

So now that you understand the benefits of diversification and have taken inventory of your portfolio, what is the most effective way for you to move forward? I will share with you what to keep in mind before selling, how to decide when to sell, and strategies to execute sales such as options, exchange funds, prepaid variable forward contracts, qualified small business stock and tax considerations. Now, let’s take a deep dive into strategic approaches to take as a shareholder and important tax implications to consider.

Most tech companies that IPO have a 180-day lockup period that prevents insiders, employees and VC funds from selling immediately. There is usually language that also prohibits hedging with derivatives (options) during that period. Lockups are intended to help prevent insider trading and provide the company with additional post-IPO price stability.

It is also important to abide by the company’s blackout periods, which prohibit transactions during more share-price-sensitive times, such as earnings or material nonpublic information releases.

Ad hoc selling — This is the most straightforward and involves the outright sale of your shares. However, this can be difficult for various reasons such as selling restrictions, the perception by others that you are unloading stock and many psychological biases that act as internal mental obstacles.

Scheduled selling — Selling all your stock at once could be both emotionally challenging and tax-inefficient. Scheduled selling involves the selling of a set number of shares over a specific period. This selling strategy can help by spreading the tax impact over a few years. It also provides an advantage from a psychological standpoint since the plan is determined upfront, then mechanically executed.

As an example, a founder might plan to sell 500,000 shares over 18 months. The founder is comfortable selling quarterly, which equals six selling periods of 83,333 shares per quarter. In a scenario where a founder is subject to blackout periods, a 10b5-1 trading plan can be implemented and set on autopilot. The company may even allow you to sell your shares during blackout periods with a 10b5-1 trading plan. See the example of scheduled selling below.

Image Credits: Keystone Global Partners

Hedging with options — Multiple hedging strategies can be implemented to protect your downside; however, some of the more common approaches used are the protective put and the protective collar. Below are basic examples of how these strategies are executed, for illustrative purposes.

Image Credits: Keystone Global Partners

  • Protective put: Buying protection against the downside.
  • Collar: Give up some upside to limit some downside.
  • Each strategy allows the owner to continue holding the stock while providing some downside protection against a stock’s decline. However, these strategies are not tax-efficient and are complicated, so working with an expert is essential. Both puts and certain types of collars would have been extremely expensive to implement during the recent market crisis because market volatility is a factor in options prices. See the below chart of the VIX (volatility index) during peak crisis. However, in some instances, these strategies can make sense.


    Author: Peyton Carr

    23 hours

    Scalable Capital raises $58M at a $460M valuation for its robo-investment platform – TechCrunch

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