Digital Wealth: $1.5T FNZ gets into fixed income fintech by buying YieldX

YieldX raised $5MM in seed funding in April 2019 and closed another $5MM round in September 2021.

Hi Fintech Futurists —

Welcome back to Digital Wealth. Today we highlight the following news —

1. NORTH AMERICA: FNZ To Acquire YieldX, Accelerating The Personalization Of Wealth Management Solutions Across The U.S. Market

2. EMEA: Wealthtech Startup Everon Closes CHF 2.5MM Seed Round From TX Ventures

3. ASIA PACIFIC: Indiassetz Inks Partnership Deal With Wealthy

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North America News

⭐🇺🇸 FNZ To Acquire YieldX, Accelerating The Personalization Of Wealth Management Solutions Across The U.S. Market - Businesswire, January 19, Florida

YieldX

FNZ, an investment platform with $1.5T in assets under administration and 20MM+ clients, has announced that it acquired YieldX, a fixed-income portfolio management startup. YieldX raised $5MM in seed funding in April 2019 and closed another $5MM round in September 2021. The startup is led by CEO Adam Green, co-founder of MoneyLion, and President and Chief Innovation Officer Steve Gross, formerly founder of AlphaParity, acquired by Franklin Templeton in 2017.

Source

YieldX has workflows to build and optimize yield portfolios, so that you don’t need to be a traditional asset manager to get exposure. Their tools let users build or optimize a personalized portfolio across a wide array of interest-bearing securities by answering questions. The (1) Optimizer allows users to leverage YieldX's multifactor optimizer to adjust a portfolio; (2) AssetExplorer lets users search, filter and sort through 2 million fixed income interest; (3) BestFit lets users build personalized corporate bond portfolios, aggregating data around ESG consideration, AI-driven valuation, and to real-time liquidity; and (4) LadderBuilder creates a bond ladder portfolio in seconds.

Zapier Data Report: The Rise of No-Code

FNZ had previously acquired Appway in December 2021, a platform offering low-code workflow automation solutions for faster client onboarding times. By 2025, 70% of new applications developed by organizations will use low-code or no-code tech, up from less than 25% in 2020.

We also think that investment technology platforms have no choice but expand their capabilities into fixed income in the current market environment, where Treasuries may perform better than stocks through the coming recession. Same goes for Alternatives.

🇺🇸 Zoe Financial Launches New Digital Wealth Platform - Private Banker International, January 19, New York

🇺🇸 BridgeFT Launches WealthTech API To Power Digital Wealth Transformation By Creating A New Cloud-Based, API-First Infrastructure For Data, Analytics, And Applications - Yahoo Finance, January 24, Illinois

🇺🇸 Kestra Financial Closes Out 2022 With $8.5B In New Recruitment Assets - Businesswire, January 24, Texas

🇺🇸 Asset-Map Partners With Cetera To Empower Financial Professionals With The Leading Advice Engagement Experience - Businesswire, January 24, Pennsylvania

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Coverage Suggestion

We’d love to hear from you what companies to cover for our short takes. If you are interested in any specific news or a review a certain company, feel free to share your request in the comments below.

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EMEA News

⭐🇨🇭 Wealthtech Startup Everon Closes CHF 2.5MM Seed Round From TX Ventures - Fintech Switzerland, January 19, Zurich

Everon

Zurich-based wealthtech Everon closed its first fundraising round at CHF 2.5MM, led by TX ventures and investor participation from Swiss 5 Group, QBIT Capital, and Wolfgang Wienand. In a 2022 publication that ranked some of Switzerland’s best asset managers, Everon placed 2nd among “asset managers of the year” and 1st among “conservative returns and Sharpe ratio strategy”. Roboadvisors perform well relative to active management in down-markets.

However, the company is competing in a crowded arena of Swiss-based digital wealth management solutions that have emerged in recent years focused on the private wealth space. See: Avaloq, Additiv,  AlgoTrader, True Wealth, and Selma Finance. Weep for the analog private bank!

Source

Everon offers (1) Wealth Management, (2) Vested Benefits, and (3) Pillar 3a. With Wealth Management, customers undergo an assessment during the onboarding process to evaluate their risk appetite and asset-class allocation using the Nobel-prize-winning Prospect Theory developed by economists Daniel Kahneman and Amos Tversky. They can then elect to manage their portfolios themselves or have them managed by Everon through a partnership with a family office, the Swiss 5 group.

With Vested Benefits and Pillar 3a (a Swiss pension plan with tax benefits), Everon partners with pension provider Liberty to allow customers the ability to invest their vested pension accounts (i.e., divorce or employer change), which are often non-interest bearing and also support their private pension plans through the platforms direct investing approach. 

Profits and profit tax revenues in Swiss Asset Management, Private Banking & Insurance (in billion CHF from 2018 to 2020)

We appreciate Everon’s effort to allow the “everyday” person to invest with a minimum investment threshold of CHF 30,000. The marketing seems to be combining traditional banking positioning — upmarket, luxury, exclusive — with digital distribution. It feels less about technology and more about a digital interface to value. That said, underneath the hood is a pretty traditional robo / digital investing entrant.

🇩🇪 ECB Contemplates Development Of Basic Digital Euro App - Finextra, January 25, Frankfurt

🇧🇪 Bank Nagelmackers Partners With Objectway To Implement Their New Private Client Offering - Businesswire, January 19, Brussels 

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Asia Pacific News

⭐🇮🇳 Indiassetz Inks Partnership Deal With Wealthy - Silicon India, January 25, Bengaluru

Wealthy

Indian real estate wealthtech Indiassetz, which has 10,000+ customers providing $2B+ in assets, and invest-tech Wealthy, which has 5,000+ wealth partners and $430MM in assets, have signed a Memorandum of Understanding (MoU) to offer wealth solutions to respective customers, whereby Wealthy customers will get an Indiaassetz's Gold membership for the first year.

Wealthy Investment Products

Real estate investing is not as popularized as equity and fixed income portfolios. The partnership between Indiassetz and Wealthy aims to bridge the gaps and bring a portfolio-based approach to total net worth, including real estate. The hope is to leverage data and machine learning models to provide a real estate super app that includes tenancy management, liaison work with the government, property advisory, maintenance of properties, interiors, valuations and buying and selling properties — all monitored in real-time. 

Indiassetz Offerings

India’s Super App Landscape

For context, there are 2.4B monthly active super app users just on China's WeChat and AliPay, India's Paytm, Singapore's Grab, Indonesia's Gojek, and South Korea's Kakao. India's digital economy, which consists of 800MM+ internet users, is dominated by these super apps.

When we look at Indiassetz competitors, we have "Housing", which has raised $157MM in funding and offers listings for new homes and rental agreements, home loans, legal services, and home inspections. Or NoBroker, which has raised $426MM and offers rental contracts with property management services like painting, moving, electrician, etc. And you get discounts on services too. As the market becomes over-saturated with super apps, only a few can survive in the long term. 

Regardless, real estate is part of net worth, and there’s no good reason it shouldn’t be managed and marked-to-market from the same interface as all your other investments. This already happens in Web3 and digital real estate stored as NFTs.

🇸🇬 Leo Wealth Boosts Asia Presence With Jachin Capital Acquisition - Private Banker International, January 18, Singapore

🇭🇰 Stashaway’s UAE Head On Building A Future-Focused Robo Platform In The Middle East - Hubbis, January 25, Hong Kong

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Blogs, Webinars, Podcasts

🇺🇸 Best TAMPs Grew 67% On Average In 2022 While Markets Erased $6T In Investor Wealth - PR Newswire, January 24, California

🇺🇸 Financial Firms Scaled Investments in Next-Gen Tech in 2022, Signaling New Phase of Digital Transformation - PR Newswire, January 25, New York

🇺🇸 How Wealth Management Firms Can Create The Ultimate Experience With Best-of-Breed Technology - Nasdaq, January 25, New York

🇭🇰 The Rise Of Digital Platforms For Investment And Wealth Management - Hubbis, January 18, Hong Kong

🇺🇸 For The Wealthy, Technology Cannot Replace Advisors (Yet) - Private Wealth, January 23, New Jersey

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Events & Reports

🇭🇰 How Retail Banks in China Can Elevate Digital Banking - Bain & Company, January 19, Hong Kong

🇺🇸 Wealth Management Edge - Informa Connect, May 21 - 24, Florida

🇬🇧 Private Banking & Wealth Management London Conference & Awards 2023 - Arena International, June 14, London

🇬🇧Digital Integration In Wealth Management 2023 - Arena International, February 21-22, London

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