Digital Wealth: JPMorgan invests in risk analytics wealthtech Edgelab & Evooq
The bank also bought ESG-focused wealthtech OpenInvest and share plan management software platform Global Shares and invested in data groups Kraft Analytics Group and MioTech
TIFIN, a wealthtech connecting retail investors, intermediaries, and investment managers, has launched a new AI-powered SaaS platform, TIFIN AMP, which combines marketing, data science and sales enablement capabilities.
TIFIN AMP uses marketing data to identify leads, rank them using various signals, and then start automated nurturing programs through custom content creation (thought leadership papers, videos, infographics), campaigns, and engagement. There’s an algorithmic element that pulls in what kinds of activities both investors and advisors do on the digital investment platforms, and this feeds rich data back into the marketing funnel.
TIFIN keeps being in the news — they’ve gotten 40+ asset management firms, raised $109MM in its Series D at an $842MM valuation, acquired Sharing Alpha, and partnered with ETFMG and Chalice Network. This offering expands capabilities towards more intelligent demand generation and lead management. Competition in this space is still brutal — FNZ raised $1.4B this year, and Avaloq is also a contender. What we like is differentiation around the top of funnel, rather than more focus on back office efficiency.
J.P. Morgan Private Bank has invested in two Switzerland-based wealth management software companies — Edge Laboratories and Evooq. Edgelab and Evooq are sister firms, employing 285, with Cédric Ullmo as CEO and Founder of both.
Edgelab and Evooq offer: (1) multi-asset class portfolio construction (including OTC and structured products); (2) pre and post-trade compliance checks; (3) portfolio simulation for stress tests and construction of an optimal risk/return ratio; (4) reporting, with aggregated views on risk, including sensitivities of moves on market variables and (5) portfolio optimisation, in which clients get investment recommendations. Edgelab is more focused on risk and analytics, and Evooq on process automation.
JP Morgan has a long-term view on fintech, and a $12B+ tech budget overall. Recently, it has done a lot in wealthtech, including acquiring roboadvisor Nutmeg for a reported $1B, ESG-focused wealthtech OpenInvest, share plan management software platform Global Shares, and investing in Kraft Analytics Group and MioTech. Consolidation in wealth software is on the rise more generally — e.g., FNZ buying New Access, a digital core banking system for private banks, and Orion acquiring Redtail CRM and TownSquare Capital. So for entrepreneurs, the plan is build a feature, sell it to a platform.
Indian fintech Yubi, previously known as CredAvenue, is a digital debt marketplace connecting businesses to lenders and investors. Yubi Invest enables wealth managers, advisors, and retail participants to invest and trade bonds, a unique pivot to capture the fixed income asset class. Reuters recently reported that India's 10-year benchmark rate appears attractive at 7.5% compared to other Asian economies. In an inflationary, risk-off environment, pitching interest rates is easier than capital gains.
Yubi's product suite includes (1) loans for SMBs; (2) a supply chain financing platform arm; (3) a co-lending marketplace for banks and non-bank financial institutionss; (4) real estate and infrastructure financing ; (5) and end-to-end asset-backed securitizations. The addition of Yubi Invest offers yields of 5-12% across products such as market-linked debentures, non-convertible debentures, commercial paper, and tax-free perpetual bonds and a unified platform to view bonds and their credit ratings across industries.
Earlier in March, the firm closed a Series B round of $137MM at a $1.3B valuation — a strong number given the fall in valuations. We like the multi-sided network play here. The company first had to build out the borrower side, attracting small businesses with capital. Now it is growing out the investor side, and creating marketplace experiences. This reminds us of OnDeck, in terms of credit risk, and Lending Club, in terms of capital sourcing. The challenge is matching duration and finding enough liquidity for both sides of supply and demand.
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