EquityZen Secures $3 Million in Round Led by Draper Associates

EquityZen, a secondary marketplace for trading pre-IPO shares, has taken in $3 million in funding this week. This Series A round brings the company’s total funding to $6.5 million. Draper Associates led the round, with WorldQuant Ventures also participating.

The EquityZen marketplace connects shareholders of private companies with its current pool of 20,000 accredited investors. The platform offers shareholders the ability to unlock liquidity tied up in privately-held shares of startups, while providing an alternative investment opportunity for investors, who can access the privately-held shares for a minimum of $20,000.

Since it was founded in 2013, New York-based EquityZen has closed more than 2,000 investments in more than 20 private companies. The company plans to use the new funds to expand its operations both within and outside of the U.S. and to make investments more accessible to qualified investors. Atish Davda, EquityZen CEO said, “We are excited to partner with [Draper Associates] as we expand investment access to tens of thousands more qualified investors who are tired of sitting on the sidelines watching a small number of Silicon Valley insiders profit from the private returns.”

Atish Davda, EquityZen CEO & Founder, and Ketan Bhalla, Product Lead debut EquityZen Institutional at FinovateSpring 2016

At FinovateSpring 2016, the company debuted EquityZen Institutional, which enables institutional investors to browse and access listings on behalf of multiple investment accounts. The institutional offering also has post-investment analytics to help advisors monitor risk and simplify reporting. Last summer, EquityZen’s Davda was featured on CNBC and earlier this year we featured the company in our review of top wealthtech players.

Finovate Alumni News

On Finovate.com

  • EquityZen Secures $3 Million in Round Led by Draper Associates.
  • Karmic Labs Lands $17.2 Million to Grow Enterprise Payment Solutions.
  • Innovation Acceleration: Incubators and Incubation Labs Drive Development in Fintech.

Around the web

  • MoneYou integrates Mitek’s identity solutions for real-time digital onboarding.
  • Xignite launches the Xignite Channel Partner Program to offer partners integrated cloud-based market data solutions.
  • Betterment launches new Socially Responsible Investing (SRI) Portfolio.
  • Forbes profiles Unison in look at the challenges facing homebuying millennials.
  • CrowdFlower adds former Amazon AI product specialist Robert Munro as VP of Machine Learning.
  • NuCypher introduces its decentralized key management system, NuCypher KMS.
  • AltFi talks about the role of “platformification” in supporting innovation in fintech with Avoka CEO Phil Copeland.
  • IDG Connect interviews Xpenditure CEO Boris Bogaert on current trends in banking including blockchain R&D.
  • IBM opens new data centers in London, U.K.; Sydney, Australia; and San Jose, California.

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

Top Business-to-Business Wealth Tech Players

wealthtech4

If you’ve been following our series on wealth tech, you’ve seen our analysis of the industry as a whole, a review of the top trends, and an examination of B2C wealth tech players.

Our wealth tech coverage continues this week with a review of business-to-business (B2B) players in the wealth tech space. These are companies that cater directly to banks, advisors, or brokerages, instead of offering products or services directly to consumers. B2B wealth tech is a large category, so I’ve sub-divided it into four digestible groups and listed my top picks for each category. Since category sizes vary, the number of selections also varies.

Alternative investment services
These are platforms that help advisors connect clients with unconventional investment types, such as private equity, hedge funds, futures, real estate, etc.

Screen Shot 2017-01-19 at 11.44.57 AMEquityZen’s EZ Institutional lets advisors give clients access to a diverse asset class

Technology for advisors and brokerages
These are tools available via API, SDK, or web interface to help advisors compete with robo advisors by allowing them to invest with less bias, increase client communication, scale operations, find new clients, and more.

Screen Shot 2017-01-19 at 11.40.41 AMTrizic offers advisors their own digital tools to compete with robo advisors

Non-U.S. B2B investment and advisor technology
Similar to the above category, these companies offer tools for advisors outside of the U.S.

Screen Shot 2017-01-19 at 11.30.52 AMmeetInvest helps advisors invest like world-renowned market experts

News and Information Companies
These are online platforms, APIs, or SaaS offerings that provide advisors market information, show them trending news, or connect businesses with market data to power their own products.

Screen-Shot-2016-10-31-at-3.22.22-PMForwardLane’s dashboard acts like a private research analyst for advisors advisors, helping them stay current on new trends and funds

Finovate Alumni News

On Finovate.com

  • Interactions Garners $56 Million in its Largest Funding Round Yet
  • Automobile Title Lending Platform Finova Financial Raises $52.5 Million
  • Check out this week’s FinDEVr APIntelligence.

Around the web

  • Kontomatik’s Konstantin Rabin shares his thoughts on successful lending in The Paypers.
  • Forbes features Jon Stein, Betterment CEO and cofounder.
  • San Diego Business Journal names eMoney Advisor one of the “Best Places to Work in San Diego.”
  • Envestnet | Yodlee launches Transaction Data Enrichment to offer transparency into transactions.
  • TradeRiver Finance reaches milestone of lending GBP100 million to U.K. businesses.
  • Portland Business Journal takes a look inside Simple’s new office.

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

Finovate Alumni News

On Finovate.com

  • Q2 Leverages MX Technology to Launch Contextual PFM
  • PTIN Gives Members Access to BizFi’s Aggregation Marketplace

Around the web

  • iSignthis to verify ultimate beneficial owners (UBOs) for fellow Finovate alum, Ixaris.
  • ABA Bank leverages TranzWare from Compass Plus to launch new Cash by Code service.
  • Top Image Systems earns spot as sample vendor in Gartner Hype Cycle for Digital Banking Transformation 2016.
  • Coinbase to extend its Bitcoin, ether services to both Canada and Singapore.
  • The Economist reports how EquityZen is catching on.
  • PC Magazine labels Xero the fastest accounting-software innovator.

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

Finovate Debuts: EquityZen Lets Wealth Managers Invest in Pre-IPO Companies

EquityZenHomepage

EquityZen was founded in 2013 as a platform to exchange private company shares. Its online marketplace conducts secondary transactions where users buy and sell existing shares of private companies with at least $100 million in enterprise value.

EquityZen’s roots stem from when CEO Atish Davda left his job at a hedge fund to pursue a career at a startup. Davda, who needed a down payment for a house and cash to purchase an engagement ring, wanted liquidity for his private company equity. At a time when startups are staying private longer and consumer familiarity with startups is greater than ever, this seemed the ideal time for Davda to launch EquityZen.

“We bring private markets to the public,” CEO Davda explains in his FinovateSpring demo, where the company launched EquityZen Institutional, an offering that enables professional wealth managers to offer their clients further diversification through investing in private companies.

Company facts:

  • Founded in 2013
  • $3.5 million in funding raised
  • Headquartered in New York City, New York
  • 10,000+ accredited investors from 15+ countries
  • 5,000+ sellers, 80% of them from a unicorn startup
  • On pace to reach $500 million of equity on its platform this year
EquityZenPresentersCEO Atish Davda, founder, and Ketan Bhalla, product lead, launching EquityZen Institutional at FinovateSpring 2016 in San Jose.

atishEquityZenBefore his presentation at FinovateSpring last month, we chatted with Atish Davda (pictured right), the company’s CEO, for further insight on EquityZen. Davda has been featured on CNBC’s SquakBox and Fox Business News. He speaks English, Hindi, Gujarati, and Python.

Finovate: What problem does EquityZen solve?

Davda: EquityZen is a stock exchange for private company shares.

Amazon went public with a market capitalization of $440M at an age of four years; today, companies remain private almost until they’re teenagers before they are accepted by public markets. With the longer gestation period, there is a gap between the financing timeline of the company and that of individuals supporting the company (shareholders wanting to sell and investors looking to invest). EquityZen has filled this gap.

EquityZenInvestments

Finovate: Who are your primary customers?

Davda: EquityZen’s platform helps shareholders (founder, investor, employee, or ex-employee) of any private company that passes our extensive filters before they can enlist. By working directly with the company, not only does EquityZen enjoy a greater trust, but also a direct channel for future shareholders who wish to sell while the company is private.

EquityZen’s platform offers these investment opportunities to accredited investors and qualified purchasers. Investors on our platform include small institutions (asset managers, family offices) as well as retail (HNWIs, financial advisers). This investor base now spans over 15 countries, and makes way to offer other asset classes.

EquityZen has established itself as one of the hubs for educating financial advisers and investors alike regarding the risks and benefits of investing in the asset class.

Finovate: How does EquityZen solve the problem better?

Davda: While it was accepted practice to build a phone-sales brokerage, EquityZen is building a future where the days of phone broker—and the overhead they bring—are numbered. Using our technology, therefore, EquityZen is able to conduct $100,000 transactions profitably, while deriving greater profits from transactions well above $1 million.

Finovate: Tell us about your favorite implementation of your solution.

Davda: While everyone else is trying to find a way to let investors put more money into the ecosystem, EquityZen is the only platform through which folks actually get money out—liquidity!—when they need it.

Finovate: What in your background gave you the confidence to tackle this challenge?

Davda: Atish Davda, CEO; Shriram Bhashyam, counsel and shareholder relations; and Phil Haslett, investments, founded EquityZen with one goal in mind: to reinvent the private market. All three have previous experience in financial services and have collectively called New York City home for over 20 years.

Prior to EquityZen:

  • Atish was product lead and first engineer at Ampush, a big-data advertising-technology firm. He began his career as a financial engineer at AQR Capital, before which he founded and operated the education-technology firm, Knolsoft.
  • Shri was an attorney at Shearman & Sterling LLP, a New York-based global law firm. Shriram advised market participants on regulatory, transactional, and trading and markets issues, with a focus on U.S. broker-dealer and securities regulation. He also advised banks and other financial institutions on U.S. bank regulation, including the Dodd-Frank Act of 2010.
  • Phil was a vice president at Pomelo Capital, a NYC-based hedge fund, focusing on capital structure arbitrage. After helping launch the fund (now $300mm+ AUM), he was responsible for trading, research, and operations. Phil started his career at Barclays Capital in their Proprietary Trading group trading credit and equity derivatives.

Finovate: What are some upcoming initiatives from EquityZen that we can look forward to over the next few months?

Davda: Wider adoption of EquityZen Institutional beyond the 1,000+ financial advisers on our platform that know about it. EZ Institutional is a new offering EquityZen launched at Finovate in 2016, allowing financial advisers and institutional investors to invest capital and manage alternatives portfolios on behalf of their clients.

Finovate: Where do you see EquityZen a year or two from now?

Davda: While we remain focused on the U.S. market for now, I would not be surprised if EquityZen increases our investor network reach from 15 countries to a bit more than that.

CEO Atish Davda, founder, and Ketan Bhalla, product lead, presenting EquityZen at FinovateSpring 2016 in San Jose:

Finovate Alumni News

On Finovate.com

  • Tradeshift Closes $75 Million Series D Round, Boosts Valuation to $500 Million.
  • Finovate Debuts: EquityZen Lets Wealth Managers Invest in Pre-IPO Companies.
  • Backbase Announces New CFO Leonore Van Waiij.
  • MyOrder, Wirecard Helps Power Shared Spending Functionality for GRPPY App.
  • Dyme Unveils Prototype of Facebook Saving Chatbot.

On FinDEVr

  • FICO Launches Falcon Assurance Navigator to Help Universities Monitor Federal Grant Spending.

Around the web

  • Chartis names CustomerXPs an Enterprise Solution player in the 2016 RiskTech Quadrant for Enterprise Fraud Tech.
  • Patch of Land Adds Institutional Investors to Real Estate Platform.
  • Prosper hires investment banks to explore raising more funds.
  • NuData Security Selected Best AntiFraud Solution at CardNotPresent Expo.
  • TechCrunch: Lending Robot makes Lending Club investing easy as setting screen brightness.
  • Tokbox launches its video broadcast solution for producers.
  • Banking Technology: Goldman Sachs to use technology from Infosys to power its new digital bank, GS Bank.
  • Business Insider features Finovate alums Azimo, eToro, Currency Cloud, and Zopa in list of potential future U.K. fintech unicorns.
  • True Potential wins Best Use of Technology at Money Marketing Awards 2016.
  • CreditHQ announces special freelancer rate.

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

Finovate, FinDEVr Alums Among Winners of 2016 Fintech Innovation Awards

FinTechInnovationAwards_2016_homepage

Of the 15 first place prizes awarded this month in the 2016 Fintech Innovation Awards, five went to Finovate/FinDEVr alums.

“This award is recognition of the strength of our idea for peer-to-peer lending and the growth we have seen since then as the idea has moved mainstream,” Giles Andrews said. “Of course, credit should go much more to the team who helped build Zopa’s scale, particularly Jaidev who took the reins last year and led the company to record levels of growth.”

“FinTech continues to be at the forefront of innovation, and that requires equally innovative RegTech solutions for risk management, security, and fraud,” Zac Cohen, Trulioo general manager, said. “Our Compliance-as-a-Service technology addresses that need, enabling pioneering technologies to grow their businesses and protect their users on a global scale.”

“In a shifting U.K. market, our range of price-optimization products are helping banks to better understand their customers’ behaviors and sensitivities through advanced analytics and analysis,” Damian Young, managing director, EMEA at Nomis Solutions, said, “This brings banks significant competitive and market advantage that will help them grow smartly and responsibly in any economic environment.”

“It’s brilliant to be recognized by the industry for our work in creating an award-winning money-transfer service, but the best prize of all is our ever-growing number of happy customers,” Azimo founder and CEO Michael Kent said. “They’re all part of the Azimo story – sending money home to support loved ones for all kinds of reasons.”

Also earning recognition at the event was EquityZen. The company, which will make its Finovate debut next month at FinovateSpring 2016 in San Jose, won the Innovation in Wealth, Asset, and Investment Management category.

Hosted by Julia Streets, CEO and founder of Streets Consulting, the 2016 FinTech Innovation Awards winners were chosen by a group of leading fintech specialists chaired by Dan Cobley, managing partner at Blenheim Chalcot. Taking home top honors in the remaining 11 categories were:

  • Innovation of the Year: ClearScore
  • Fintech Marketing Campaign of the Year: “Cashless on the Catwalk” by The 10 Group and Visa Europe
  • Fintech Startup of the Year: ClearScore
  • Innovation in Corporate Banking Solutions: Idea Cloud by Idea Bank SA
  • Innovation in Insurance: Bought by Many platform by Bought By Many and Ping An Insurance.
  • Innovation in Lending: Marketinvoice
  • Innovation in Payments: Zwipe Payment by Zwipe
  • Innovation in Risk Management: Imagine Software
  • Innovation in Trading Systems: FX Connect from State Street Bank
  • Innovation in Treasury Management: Walletsizing by Vallstein

The FinTech Innovation Awards were held at The Brewery in London on April 13th. The event featured a keynote address from author and Duke University professor, Dan Ariely, as well as remarks from Minister for the Cabinet Office and Paymaster General, Matt Hancock. Finovate alum Strands was among the event’s sponsors.

FinovateSpring Sneak Peek: EquityZen

EquityZen_homepage_April2016

FS2016-wdateA look at the companies demoing live to 1,500+ fintech professionals on May 10 & 11. Register today.

EquityZen is a streamlined investment platform focused on offering access to proven, pre-IPO technology companies for individuals, advisers, and institutional investors.

Features:

  • Professional investors can securely execute investments for multiple clients
  • Integrated analytics allow management of all of clients’ private investments
  • Simplified research tools

Why it’s great
We’re bringing the power of our platform, which has provided access to many of the largest VC-backed U.S. companies in the U.S., seamlessly to institutional investors.

Presenters

AtishDavda_EquityZenAtish Davda, CEO
Davda is the CEO and co-founder of EquityZen. Prior to founding EquityZen, he was product lead at Ampush. He began his career as a financial engineer at AQR Capital.
LinkedIn

 

 

KetanBhalla_EquityZenKetan Bhalla, Product Lead
Bhalla leads product at EquityZen. Prior to EquityZen, he was the COO of Sliced Investing and was previously a vice president in J.P. Morgan’s Alternative Investments Group.
LinkedIn

Finovate Alumni News

On Finovate.com

  • Where are they now? A look at FinovateSpring 2015 Best of Show Winner Successes.
  • “PayPal Marks U.K. Rollout of PayPal Credit with Interest-Free Financing”

On FinDEVr.com

  • “FICO Launches Score Simulator, Adds New CIO Claus Moldt”

Around the web

  • ebankIT shares top honors with Kerv at Temenos Innovation Jam.
  • Top Image Systems inks $115,000 accounts-payable deal with unnamed U.S. technology company.
  • Xceed FCU transitions to Fiserv-hosted DNA account-processing platform.
  • INETCO powers BECU’s omnichannel monitoring and analytics solutions that won the Celent Model Bank Award in the omnichannel category.
  • Red Herring Europe names Featurespace a Top 100 company.
  • Backbase powers Altyn-i, a new digital bank in Kazakhstan.
  • “Signifyd Launches Fraud Protection App for Magento Marketplace”

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.