There are no secrets online anymore. People share everything, even the performance of their personal stock portfolios. Social investing site Covestor raised $6.5 million in a series A financing based on the appeal of this concept. The round was led by Union Square Ventures and Spark Capital. Europe’s Amadeus Capital Partners also participated. The startup previously raised $1 million last June from the founders of Seekingalpha, Betfair, Tribe.net, and Wallstrip.
Covestor, which is still in beta, lets you link your real brokerage account to the service so that you can compare your returns against other Covestor members, professional fund managers, and the overall market. As I wrote last October:
The idea is that eventually, the best investors will emerge, and Covestor plans on creating ways to invest in their “funds.” They are actually just going to be selling the data and linking it to the brokerage accounts of people who choose to be followers. The investing stars who arise from this social soup will be able to offer their trading data for a fee once they build a track record or give it away for free and enjoy the notoriety of being an investing whiz. Covestor will take its cut as a management fee.
Covestor competes with Cake Financial—which also lets you link to your real brokerage account and tracks more than $1 billion worth of investments—SocialPicks, and Motley FoolCaps. Covestor won’t disclose the total value of the funds it tracks, but last October it was $100 million. Presumably, it is now much higher.