“It’s like a junkyard here, organized like one of those basements on ‘Hoarders’… [A tale of] old apps, often run by people who never had a hand in creating them.” 

No, this is not Gordon Ramsay on Kitchen Nightmares— it’s commentary on IT systems at one of the largest banks in Europe. Financial infrastructure in the region is in desperate need of an overhaul, with the situation perhaps most dire in WealthTech. Legacy, incumbent platforms are struggling to keep pace with the demand for digital-first experiences and modern use cases that retail investors have come to expect.

This is why when we first met Martin Kassing, co-founder and CEO of Upvest, several years ago, we were immediately captivated by his vision for building a category-defining, enterprise-grade investment infrastructure company in Europe. Upvest offers a universal Investment API that enables banks, fintechs and any direct-to-consumer (D2C) business to efficiently launch investment products (e.g., fractional share investing, savings plans, roundups) and offer any asset class (e.g., stocks, ETFs, mutual funds, and soon derivatives, ELTIFs, and bonds in any currency) in their applications. 

In essence, Upvest allows large enterprise financial apps to embed their own ‘Trade Republic’ or ‘Robinhood’ within the relevant front-end consumer experience, while abstracting away all the back-end complexity required to support the end-to-end trading lifecycle.

In a world where many financial software developments are marginal improvements upon incumbents, it was refreshing to hear Martin articulate a vision for Upvest as a true step-change from legacy vendors—with the ultimate goal of making investing as easy as spending money. At Sapphire Ventures, we have a strong affinity for ‘boring infrastructure’ that tackles some of the most pressing challenges facing the largest global industries. We could not be more excited to partner with Martin, as well as the entire Upvest team, to co-lead their €100M¹ Series C financing round.

Modern Investors, Legacy Solutions: A Perfect Storm for Upvest

Retail investing seems like a straightforward workflow at first glance. A consumer comes to the front-end application of an investment platform at a bank, fintech or independent wealth manager, submits a buy/sell order, and the transaction is processed. However, the point of order submission (or even initial account creation) is quite complex. These investment applications are built on top of a convoluted web of infrastructure for brokerage (trading connectivity and order management), clearing and settlement (order lifecycle tracking and reconciliation), custody (security account and user mgmt.), as well as mid-/back-office technology and operations—all of which are required to power embedded investment products.

Stitching together all these functions becomes even more challenging when creating a truly Pan-European investment offering, given the significant infrastructure and liquidity fragmentation in the region. Providing broad access to the full range of relevant European asset classes, such as stocks and ETFs, requires integrations with a wide array of exchanges, clearinghouses, custody banks, tax regimes and more. Further, as with any software product that handles financial assets, vendors operate in a highly regulated space, creating additional compliance scrutiny that can stymie both the client and front-end user experience.

Given this complex reality, it is perhaps no surprise that incumbent WealthTech infrastructure built on a monolithic architecture, lacking API-first platform design, and/or relying heavily on third-party vendors to power core functions, is simply not hitting the mark. In fact, these costly legacy systems are not only difficult to implement and unwieldy to maintain, but also a barrier for financial apps to offer ‘table-stakes’ features. For instance, real-time account opening and funding, micro-investing and customizable portfolio and product creation across relevant European asset classes are among the essential features required to make investing simple and accessible for ‘Main Street’ investors.

Upvest: Setting the Standard for Modern Investment Infrastructure in Europe

We believe this creates the perfect opportunity for Upvest. They have taken a novel approach to solving the aforementioned challenges by building an investment infrastructure for the European region from the ground up. Upvest weaves together three distinct businesses: 

1) Core banking system to automate the end-to-end trading lifecycle

2) Regulatory licensing for the UK & Europe that solves for all markets and customer size segments in the region

3) Integrations into best-in-class value chain participants to offer all asset classes and support key mid-/back-office functions 

Together, these elements create an ‘all-in-one’ platform, enabling fintechs, banks and any D2C business to create embedded investment experiences that delight retail users.

In addition to the robustness of the platform, we feel the flexibility of Upvest’s API makes the approach unique. Along with its modern cloud-based, microservices architecture, Upvest shines in areas like rapid integrations, ‘a la carte’ product/feature consumption for clients, flexible legal setup with built-in compliance and market-leading cost efficiency. Moreover, the Upvest engine can power key use cases, such as fractional shares (invest in Stocks or ETFs for as little as €1), automated investment strategies, portfolio recommendations, savings plans and more, which are crucial for creating access to and demystifying investing for everyday retail users.

It is this full-stack, proprietary approach that has allowed Upvest to scale to support some of the largest enterprise fintechs in the region with customers such as Revolut, N26, bunq and Raisin, with their partnerships now expanding to some of Europe’s largest retail banks and D2C wealth platforms.

Backing the ‘Upvengers’: Marvel’s Unsung Heroes in the European Investment Infrastructure Stack

Lastly, what truly sets Upvest apart is not only its novel technological approach, but also the exceptional team Martin has built—an elite group of ‘Upvengers’ whose talent and expertise drive the company’s success. We have heard customers repeatedly rave about the caliber and expertise of the Upvest organization at all levels, from the executive leadership that brings together decades of leadership from top fintechs in the region (Wise, Raisin, Trade Republic) all the way to the implementation and customer support teams that are in the trenches with clients on a day-to-day basis. 

At Sapphire Ventures, we have been fortunate to partner with category-defining fintechs in EMEA, including Currencycloud, Wise, BioCatch, Feedzai, Yapily, and more. And while incumbents may believe like Thanos that “reality [or in this case, status quo retail investing] is often disappointing,” Martin envisages a future where any business can create simple, delightful, and rewarding end-user investment experiences using Upvest’s API. We are honored to support Martin and the team as they empower the next 100M+ European investors to take wealth into their own hands.

If you’re interested in learning more about Upvest’s products, you can find more information here. If you’re interested in joining the Upvengers, check out their openings here.