Chatham-based DriveWealth, the fintech startup with a unique approach to investing that allows its business customers to offer fractional shares of stocks, has closed a $21 million Series B investment.
The fundraising round was led by Raptor Group Holdings (New York), SBI Holdings (Tokyo) and Point72 Ventures (Stamford). DriveWealth’s existing investors, including Route 66 Ventures (Alexandria, Va.), also participated in the round.
DriveWealth’s suite of APIs provides technology designed to modernize financial services for the digital age. The company’s cloud-based infrastructure offers powerful scaling and pricing efficiencies enabling its global partners – including online brokers, digital advisers and mobile online financial-service companies – to seamlessly access the U.S. securities market.
Additionally, DriveWealth’s technology stack allows its partners to deliver native investment experiences, including DriveWealth’s real-time dollar-based investing capabilities, directly through their own mobile applications.
In an email, Robert Cortright, CEO of DriveWealth, updated us on the startup’s progress since we last covered them, at the end of 2016. “Our greatest development is the expansion of partners throughout the globe,” he told us. “DriveWealth’s platform provides a modern suite of APIs that enable the creation of unique financial products for their investors.”
According to Cortright, the new partners include:
1) CreditEase (Beijing), the largest robo adviser in China;
2) Beanstox (managed by DriveWealth, in Chatham), through which DriveWealth continues to work with O’Shares ETF Investments (Boston) and with “Shark Tank” panelist Kevin O’Leary to develop an investment product for O’Leary’s fan base in the U.S.;
3) MoneyLion (New York), for which DriveWealth launched MoneyLion Plus, a membership-based loan and investment product that enables its customers to build long-term wealth while retaining the ability to address near-term liquidity needs;
4) Stake (Sydney, Australia), which offers a simple way to trade U.S. equities in Australia. Stake is pushing the trend toward free trading;
5) Freetrade (London, U.K.), which will be launching soon;
6) EasyEquities, a concern based in Johannesburg, South Africa; and
7) Invstr, a London company “that combines the Investing Game and fractional-share capabilities under one platform,” according to Cortright.
NJTechWeekly.com asked Cortright how his company had found its newest investment partners. “We had two main goals when identifying investors,” he answered. “The first was to find a partner in Asia. We are a global business with heavy influence on the continent, and that is how we connected with SBI Holdings.
“Second, we wanted to sync with teams who are heavily engaged in investing and are consistently building new investment products. Our idea of disruption is the infrastructure we developed that solves the issues legacy brokers are currently facing. All three of our partners are involved in building new investment products for today’s digital world.”
In a press release Cortright said, “We are thrilled to partner with SBI Group, Japan’s leading provider of internet financial services and two leading venture investing firms, with significant financial technology experience and expertise.”
Yoshitaka Kitao, chairman of SBI Holdings commented: “As a pioneer of internet-based financial services, we are excited to add DriveWealth to the world’s first ‘financial ecosystem’ that SBI has now expanded from Japan to worldwide.”
Clifford Friedman, managing director of Raptor Group Holdings, added: “We are pleased to partner with DriveWealth’s experienced management team to support the Company’s growth, as it develops its innovative technologies and scales its business focused on the next generation of investors in markets worldwide, that can leverage Raptor’s network of global industry relationships and fintech portfolio of companies.”
Pete Casella, head of fintech and financial service investments at Point72 Ventures, stated: “We believe the next generation of fintech successes will be enabling technologies that allow seamless access to best of breed financial services. DriveWealth has built a world class tech-driven brokerage stack that allows fintech firms to incorporate a wide range of investments capabilities into their product offerings.”
Dan Dall’Asta, partner at Route 66 Ventures, concluded: “We are delighted to welcome such esteemed partners in Raptor, SBI and Point72. Since investing three years ago we’ve witnessed significant growth, and this funding further positions the Company to take a leading role in modernizing the infrastructure for the financial services ecosystem.”
Credit Suisse acted as exclusive placement agent for DriveWealth in connection with the transaction.