Retail investors in the U.S. looking for ways to play the stock market have several startups offering them services, and now Motif Investing has raised $35 million in late-stage funding from new backers to take its services worldwide.
Already backed by financial services and venture capital powerhouses like Goldman Sachs, Ignition Partners, Norwest Venture Partners and Foundation Capital, the new round sees European venture firm Balderton Capital joining with JPMorgan Chase & Co. and Wicklow Capital to further back the company’s technology development and international expansion.
“We want to accelerate our platform to wealth management,” says founder and chief executive Hardeep Walia, a former Microsoft executive who founded Motif alongside former hedge fund investor Tariq Hilaly in June 2010. “We just launched an advisor product… [and] we’re planting the seeds of going international, which is why we brought in Balderton.”
Unlike other big wealth management and investment advisory services like Betterment and Wealthfront Motif partners with investment advisors on wealth management products versus the Betterment and Wealthfront models of using software tools to optimize investments for their customers.
The new product slots in alongside an elegant investment tool for backing publicly traded companies centered around what the company calls “motifs” — or thesis investments. If a retail investors believes strongly in corporate governance, clean technology, or the impact of the NY Yankees season on trading in copper futures, they can select up to 30 stocks that would fit those Motifs and invest in them as a basket.
In all, Motif has raised $86 million, which makes it one of the best capitalized companies tackling the retail investment services for consumers. It also has a board of unparalleled depth when it comes to understanding the financial market.
One of the company’s not-so-secret weapons is the presence of Arthur Levitt Jr., former chairman of the Securities and Exchange Commission and a longtime champion of the retail investor in public markets in their battle to stand on somewhat equal footing with the big boys of finance.
Levitt hasn’t served on a public company board since he left the SEC, but agreed to join Motif’s board — and invest in the company — after a years-long campaign by Walia to get him to join.
“I was interested in its technological approach, because I’m interested in lots of technology. I have every piece of Apple equipment since the company was formed… I tweet obsessively and when Hardeep told me that the company is really something that benefits individual investors with its transparency and low cost, I saw its elegance,” says Levitt.
It was Levitt who brought Goldman Sachs on board with the company. “I called Gary Cohn and said I’ve got something that might be of interest to you,” Levitt recalls. “He said I like this company we will invest $10 million and we’ll close the deal in two weeks.”
It was soon after Goldman agreed to invest that Levitt joined the board. “Technology has been a friend of investors for years. Hardeep’s concept is spot on which is a movement to allow investors to access markets in a comprehensible way for the lowest possible expense,” Levitt says.
The company’s technology also drew in Balderton. “We searched for companies that were disrupting the financial services industry that could affect European markets as well,” said Tim Bunting, general partner at Balderton Capital and Motif board advisor in a statement. “Simply put, there is absolutely nothing like Motif available in Europe. We are delighted to use our expertise to introduce Motif to an entirely new set of investors and to help the company scale globally.”
As a result of the deal, Motif also announced that Wicklow Capital chief investment offier Ben Rose and a JPMorgan Chase executive will become board observers.
Image via Flickr user George Rex