Got a hot technology concept for advisors but need a funding boost?
There's a fintech competition styled after the popular television show "Shark Tank" that's looking for fresh meat — sorry, applicants.
ScratchWorks, a startup accelerator, has launched the second year of its competitive program to connect young firms with investors.
The fintech accelerator is founded by five prominent chief executives, including Marty Bicknell of Mariner Wealth and Dick Burridge of RMB Capital — who head firms that manage approximately $27 billion in combined assets under management, according to SEC filings. A spokesman for ScratchWorks put the figure at as much as $60 billion in combined assets.
ScratchWorks held its inaugural event at Barron’s Top Independent Advisors conference in March and selected three winning fintechs — two of which landed significant investments from the group.
“You’re sitting with the best and the brightest,” says Shannon Eusey, chief executive of Beacon Pointe Capital, who will be sitting on the panel for the first time in 2019. Barron’s advisor summit is scheduled to be held in Salt Lake City in March.
“Technology is really driving our industry right now and having the perspective of what is on the forefront really helps,” Eusey says, who oversees 140 employees and $8 billion in assets at Beacon Pointe, according to the firm’s filings. “The biggest thing I’m looking forward to is seeing things before they hit the market.”
What new technologies have the advantage?
“Analytics and big data and making sure we have a better understanding of our clients and the market,” Eusey says. With more data being produced than any other time in human history, there are troves of actionable information hidden within a complex soup of customer data, she notes.
“Investor behavior is so important — whether or not a client is at risk, or what’s going on within a client’s life that can help beyond just general investment advice,” she says, such as helping pay down college loans or buying a new home. “What data trend sets are our clients looking at that can help us better understand them.”
ScratchWorks invested in two of the three finalists from its inaugural competition. It first invested an
The exact amount of the funding has not been disclosed, although the firms are in talks for a second round that should be well into the seven figures, says Snappy Kraken CEO Robert Sofia. “There was a small, immediate investment, but that also gave us exposure to the group of investors, and once we started working with them more closely to close on the initial amount, talks began about additional funding,” Sofia says.
Revenue has grown 145% year-over-year and the firm’s client base has expanded to more than 1,000 clients, Sofia adds.
As digital technology transforms wealth management, industry leaders take a stand on where the field is headed.
“You’re in a room with some of the most successful advisors in the industry and you get to see them respond to what you’re building,” Sofia says about his experience pitching his product to room packed with hundreds of advisors. “It’s extremely validating.”
The funding will help the marketing technology firm provide infrastructure for recent growth, offer more content and better technical support, he says.
“You look at a screen in real-time and see that 80% of the advisor in the room would invest,” Sofia says. “Now, that’s market research.”
