Big headlines were made in Jul'21 when Titan closed on a $58 million Series B led by Andreessen Horowitz. Whilst this inevitable is exciting news for VC funds & founders alike the aspect which is most exciting is the impact this will have on individuals who have their savings or pension/superannuation/401(k) in mutual funds.
Fintech in recent years has generally focused on lending, credit cards, personal banking, BNPL or broking. This platform focusses on mutual funds. Generally speaking, you can understand why this sector has not been disrupted because a lot of the desirable investments require you to be an "Accredited Investor" and fund managers, unlike lenders, require track record to ensure they acquire funds under management and a track record takes time.
This platform will reportedly allow investors to get increased transparency into what they are investing in and invest low increments (as little as $100). Whether this transparency & new-age platform provides retail investors good returns, it is likely that the privileged positions that the big mutual funds have operated will eventually come under threat where they do not appeal to the next generation of retail investors (and potentially institutional investors)
From the perspective of Titan, they are not creating a frictionless platform; they are charging 25bps for entry/exit. Nonetheless, this platform offers retail investors access to a product which usually only Accredited Investors can gain exposure to.
Few stats have been released on Titan, however, interestingly they have $1bn FUM from 30,000 customers. Whilst it is possible that this is skewed by big accounts; this suggests it has larger value customers than the typical "auto-investment" model which deployed by Acorns (Aus) or Nutmeg (UK). This lumpier account balance is enviable, I guess time will tell how "sticky" their customer base
Either way, we look forward to seeing how Nutmeg will change the investment landscape overseas and in-turn the Aussie market
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