Farther raised $15MM in its Series A round, led by Bessemer Venture Partners. The firm raised a total of $22MM since 2019, now with a valuation of $50MM. Assets under management have increased 4x to more than $250MM this year.
Farther is a play on taking the traditional advisor desktop, combining it with a roboadvisor TAMP, and hiring in-house advisors while paying them out up to 75 % of revenue. For end-clients, the wealth management platform has investment products, like (1) ESG custom portfolios that track existing ESG benchmarks, and (2) alternative investments in PE and hedge funds with account minimums as low as $25K, and (3) crypto, because YOLO, via access to funds that offer single or multi-coin exposure. There’s an automated “cash waterfall” feature that detects excess cash and routes it into new assets.
Many wealthtech raises in the past months were B2C roboadvisors (e.g. Dezerv’s $20MM raise, Bibit’s $80MM raise), in part due to the recent market collapse and the resulting distaste for more active trading / brokerage, i.,e., the Robinhood model. Farther’s model is closer to B2C financial planning, which is less viral and sometimes harder for consumers to understand, but does have niche traction (e.g. PINA’s $3MM raise). The $15MM raise is a signal that perhaps TAMPs can be challenged by a tech-enabled RIA going after the high-net-worth demographic.
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Investment company Abrdn has become the biggest external stakeholder in Archax, a London-based digital asset exchange, brokerage, and custodian. Archax is the first and only digital asset exchange that is regulated by the UK's Financial Conduct Authority. They are the real deal, sweating out the licenses while the rest of crypto trades around levered NFTs.
Archax provides institutional investors a platform to trade digital assets, acting as a bridge to traditional finance. Institutions can apply to become a member of the Archax exchange. If they pass due diligence and the application is approved, institutions can buy and sell digital assets globally. The platform also provides a segregated digital asset custody service in partnership with METACO and IBM. The solution protects the cryptographic keys through the IBM product Hex Trust.
Abrdn's AUM dropped by 17% since H1 FY2022, from £464B to £386B, and the firm will be merging or closing 100 ‘non-core, subscale, or duplicative’ funds to deliver £75M in savings for its investment business. Within this context, the Archax deal showcases that asset managers have to pursue growth in digital assets. This news comes shortly after BlackRock partnered with crypto exchange Coinbase and unveiled a spot bitcoin private trust for institutional investors.
ZA Bank, a Hong Kong-based neobank with 500,000+ customers, is launching a range of investment funds from global asset management companies, such as the Franklin Technology Fund, AB American Growth Fund, and Amundi Balanced Fund.
One of the top-selling funds is Hong Kong-dollar fund by Franklin Templeton Investments (Asia), which invests in tech companies, such as Microsoft, Apple, and Amazon. The fund has an annual charge of 1.50%. We note the fund’s performance at the end of June was -35% YTD. Similarly, Philippines-based ATRAM, which manages $3B in client assets, has reported poor fund performance across its 18 feeder funds. One of ATRAM’s top-selling funds, the Alpha Opportunity Fund is down 13% YTD.
WeLab, another Hong Kong-based virtual bank, also expanded its wealth offerings by launching GoWealth, a platform that uses investment expertise by asset manager Allianz Global Investors to offer personalised advisory services to customers.
A survey of 1,000 Hong Kong-based respondents, aged 20-59, highlighted that 65% of respondents were unaware of their investment portfolio composition and its performance. ZA Bank can potentially acquire a large market share with its new venture, as the number of virtual bank users in Hong Kong is poised to rise to 25% by 2025. The dividing line between neobanks and roboadvisors is what again?
We always recommend this report. Reminder that from an operating perspective, all those features and ease of use matter. The takeaway is that there’s no sticky winner-take-all feature set, it can all be copied. From a financial perspective, only returns matter. Things looking pretty dire YTD.
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