#455
The Move To Main Street

Published:

Sep 17, 2022


Author:

Roxy Horrie

Published:

Sep 17, 2022


Author:

Roxy Horrie


Share:

A changing global economy coupled with heightened geopolitical risk has forced investors to rethink how they search for yield. Investments in alternative assets have already doubled from $6t to $12t globally over the last decade. We are now seeing a surge in demand from everyday investors who want access to the same asset classes and investment strategies typically reserved for ultra high net worth individuals and funds.

Historically, PE funds’ accreditation requirements and ticket sizes have priced out a sizable demographic. But as we witness a generational shift towards investing preferences, against the backdrop of one of the largest wealth transfers in history (~$80t), it is no longer a one-sided push for access. Increasingly, asset managers are opening up more and more to retail in response to this demand, broadening their client base to encompass Main Street.

This week, Allocations - an API-driven startup that helps private fund managers raise capital from a single investment for pooled sources - has crossed $1b in AUM and raised $5m in funding at a valuation of $150m. Private equity firm KKR also made headlines in their move to tokenize one of their blockchain funds to broaden institutional private market strategies to individual investors. In addition, Titan - the online brokerage backed by a16z - launched a new feature to allow retail investors to allocate into private funds managed by PE giants Apollo and Carlyle Group. Apollo itself has been outspoken on its goals to target everyday investors, raising $1b from individual investors between 2018-2020 and targeting $15b annually by 2026.

Globally, private equity firms managed $6.3t in assets in 2021. But as PE giants look to attract clients outside the typical pool of large institutional investors including pension funds and retirement plans, the vanguards of the industry will also need to re-fashion themselves, streamline processes to justify the costs and administrative burden that come with taking smaller cheques.

The Move To Main Street

Portfolio News


Sigma Ratings announces Series A led by Mosaik Partners to scale intelligent relationship risk management - Also participating in the round are existing investors FinTech Collective and Contour Ventures, as well as new investor AngelList Ventures who join existing shareholders Fitch Ratings and Barclays PLC. Sigma's expansion comes at a critical time, as firms seek to simultaneously address increasing regulatory, geopolitical and reputational-related risks, and digitally transform outdated and expensive legacy approaches to risk management and regulatory compliance. Read more

Jacksonville Jaguars secure the payments W to provide business users with virtual cards via Extend - Extend, a virtual card and spend management platform, has partnered with the NFL Jacksonville Jaguars to provide the team’s 200+ business users with a proactive way to manage and control company credit card spend. With Extend, the Jaguars can keep secure virtual cards on file with different vendors, share cards with employees who need to make purchases, and gain real-time visibility over spending on expenses ranging from travel and concessions to equipment and ad campaigns. Read more

Ocrolus launches comprehensive fraud detection solution for lenders - Lenders traditionally perform manual review of documents to inspect for file tampering, document manipulation, inconsistencies, and other suspicious activity. This time consuming, tedious, and error-prone process can result in significant losses. Ocrolus Detect automates fraud workflows, providing detailed signals and clear visualizations of fraudulent activity undetectable to the human eye. Read more

Vestwell launches two products for 401(k) third party administrators - Vestwell's two new products are a TPA partner product, Vestwell Flex, and a TPA portal. Vestwell Flex provides small businesses and retirement plan advisors with an exceptional recordkeeping product that combines the ease of the Vestwell platform with the seamless service of industry-leading TPA partners. In tandem with Flex, the portal allows TPAs to efficiently scale their practices in the small and mid-size 401(k) retirement plan market. Read more

The Move To Main Street


Investment giant KKR puts portion of private equity fund on Avalanche Blockchain - KKR is working with digital-asset management platform Securitize Capital, which will handle the onboarding of new investors, to make its Health Care Strategic Growth Fund available on the Avalanche blockchain. Individuals will be able to invest in KKR's health-care fund through a tokenized feeder fund and KKR will become the largest private-fund manager to date to tap blockchain technology to make its private equity offering accessible to individual investors. Read more

Allocations just got valued at $150m to help private equity funds lure smaller investors - Interest in alternative investments such as private equity, real estate and crypto continues to surge, and Miami-based fintech startup Allocations is riding the wave. Its customers are asset managers looking to offer these alternative investment opportunities to their private wealth clients, who tend to be high-net-worth individuals that meet regulatory accreditation requirements applied to many alternative assets, Advani explained. The company is betting that retail investors will continue to show strong demand for alternative asset classes that have typically been dominated by institutions. Read more

Apollo, Carlyle launch funds on a16z-backed Titan as PE's retail push expands - The move comes amid a push from asset managers to expand retail access to private markets, as demand from individual investors grows and Wall Street powers seek to broaden their client base to Main Street. Read more

Industry News


The Ethereum merge is done, opening a new era for the second-biggest blockchain - The Merge was no small feat, swapping out one way of running a blockchain, known as proof-of-work, for another, called proof-of-stake. The payoff is potentially gigantic - Ethereum should now consume 99.9% or so less energy. Ethereum’s developers say the upgrade will make the network – which houses a $60b ecosystem of cryptocurrency exchanges, lending companies, non-fungible token (NFT) marketplaces and other apps – more secure and scalable, too. Read more

Milk, diapers and checking accounts: banking comes to Walmart - A venture that’s majority-backed by Walmart is poised to emerge from the shadows this month with digital bank accounts meant for the retail giant’s 1.6m US employees and legions of weekly shoppers. The move heralds the arrival of Walmart’s fintech push after years of fitful efforts to expand its financial-services offerings. Eventually, One -- the financial-technology startup Walmart is leaning on for the effort -- is hoping to offer a bevy of other products, from loans to investing, in an effort to become a one-stop shop for consumers’ financial needs. Read more

Starbucks details its blockchain-based loyalty platform and NFT community, Starbucks Odyssey - Starbucks Odyssey, launching later this year, is the coffee chain’s first foray into building with web3 technology. The new experience combines the company’s successful Starbucks Rewards loyalty program with an NFT platform, allowing its customers to both earn and purchase digital assets that unlock exclusive experiences and rewards. Read more

U.S. banks lost a record $370b in deposits last quarter - The outflow in the quarter isn’t a problem for banks, which are sitting on more deposits than they want. Deposits in the banking system usually stay relatively stable, but swelled by some $5t in the past two years due to pandemic stimulus. Now, a series of Federal Reserve rate increases is taking some of that money out of the system, in part by decreasing demand for loans and increasing demand for government bonds. Read more

Schwab, Citadel Securities, Fidelity, other Wall Street firms start crypto exchange EDX Markets - The exchange will be led by CEO Jamil Nazarali, formerly a senior executive at Citadel Securities, billionaire Ken Griffin's massive trading operation. Other high-profile EDX backers include trading firm Virtu Financial (VIRT) and venture capital firms Sequoia Capital and Paradigm. Read more

J.P. Morgan to acquire Renovite Technologies - The strategic acquisition of Renovite will help J.P. Morgan Payments build its next-generation merchant acquiring platform, bolster the firm’s payments modernization strategy and support its journey to the cloud. Upon closing of the transaction, Renovite will become part of J.P. Morgan Payments, which combines corporate treasury services, trade finance, card and merchant services capabilities at the firm, delivering an integrated payments experience to clients across the economy. Read more

Major credit card companies are making it easier to track gun sales - The International Organization for Standardization, which sets standards for payment transactions, has approved the creation of a special code for gun stores to use when processing credit or debit card transactions. Visa and Mastercard had resisted the code but said they will adopt it. Read more

Payments company Bolt scraps $1.5b deal to buy crypto firm Wyre - The official line is a mutual termination, but a source close to the deal says the final call was made by Bolt CEO Maju Kuruvilla, who was hired shortly before the original deal was announced, and that Bolt wasn't required to pay a termination fee. Read more

Brazilian unicorn, EBANX, expands into Africa - EBANX, a multinational fintech company, has announced plans to expand its payment gateway solution and operations outside Latin America for the first time. Present in 15 countries in Latin America, the 10-year-old unicorn has processed over $1b in payments and wants to initially focus on mobile money in Africa. Read more

Goldman Sachs partners Modern Treasury to push embedded payments - The partners say they will help joint customers seamlessly embed and scale domestic and international payments into their products. Modern Treasury’s payment operations software platform will provide mutual clients with an integrated money movement solution, with payments powered by Goldman Sachs Transaction Banking (TxB). Read more

Select Financings


Bitmama - Nigeria based blockchain payments startup raised $2m in pre-seed funding led by Unicorn Growth Capital and Launch Africa. Read more

Candis - Berlin based automated accounting software startup raised $16m in Series C funding led by Viola FinTech. Read more

Claimer - London based startup for claiming financial incentives from the government raised $4.2m in Seed funding led by Project A Ventures. Read more

Codi - San Francisco based flexible office lease company raised $16m in Series A funding led by Andreessen Horowitz. Read more

Community Labs - New York based crypto software development startup raised $30m in growth funding led by Lightspeed Venture Partners. Read more

Denim - New York based freight and logistics platform raised $126m in Series B funding led by Pelion Venture Partners. Read more

Diamond Standard - New York based blockchain diamond commodities trading startup raised $30m in Series A funding led by Left Lane Capital and Horizon Kinetics. Read more

Doodles - Vancouver based NFT startup raised $54m in Series A funding led by SevenSevenSix. Read more

Ethic - New York based investing startup raised $50m in Series C funding led by Jordan Park. Read more

Far Homes - Seattle based platform for buying and selling real estate in foreign markets raised $2.25m in Seed funding led by PSL Ventures. Read more

Fazz - Singapore based digital financial services group raised $75m in Series C funding led by Tiger Global, DST Investment and B Capital. Read more

Forward - Thailand based DeFi platform for derivative trading raised $5m in Seed funding led by Primestreet Capital. Read more

Goldsky - San Francisco based data infrastructure company for crypto startups raised $20m in Seed funding led by Felicis and Dragonfly Capital. Read more

heyData - Berlin based compliance startup raised €3.3m in Seed funding led by Ten VC. Read more

Kafene - New York based lease-to-own financing startup raised $18m in Series B funding led by Third Prime. Read more

Kippa - Nigeria based payments and financial management startup raised $8.4m in Seed funding led by Goodwater Capital. Read more

Majority - Miami based mobile banking service for migrants raised $30m in Series B finding led by Valar Ventures. Read more

Neem - Pakistan based embedded finance platform raised $2.5m in Seed funding led by SparkLabs Fintech. Read more

Ownera - London based network for tokenized assets raised $20m in Series A funding led by J.P. Morgan and LRC Group. Read more

Portofino Technologies - Switzerland based developer of high-frequency trading grade tech for crypto and other digital assets raised $50m in growth funding led by Valar Ventures, Global Founders Capital and Coatue. Read more

Power - New York based credit card issuance platform raised $16.1m in Seed funding led by Anthemis and Fin Capital. Read more

Ratio - San Francisco based buy now pay later startup raised $11m in growth funding led by Streamlined Ventures, Cervin Ventures, 8-Bit Capital and HoneyStone Ventures. Read more

Reku - Indonesia based crypto exchange and marketplace raised $11m in Series A funding led by AC Ventures. Read more

Rosaly - Paris based salary advance startup raised $7.5m in Seed funding led by Fin Capital. Read more

SavvyFi - Nashville based college savings and student loan repayment startup raised $4.9m in Series A funding led by Aligned Partners. Read more

Sender - Singapore based NEAR eco-wallet raised $4.5m in growth funding led by Pantera Capital. Read more

Stack - Seattle based crypto education and training startup raised $2.7m in growth funding led by Madrona. Read more

Payall - Miami based cross-border payments startup raised $10m in Seed funding led by a16z. Read more

Turako - Kenya based insurtech startup raised $10m in Series A funding led by AfricInvest and Novastar Ventures. Read more


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