Fintech platform provider (and RIA owner) Savvy Wealth has closed a $26.5 million Series A funding round, fueled by a $15.5 million funding push led by venture capital firm Canvas Ventures.
The firm plans to use the funding to expand its AI-powered technology platform, increase the expertise of its product and development teams, and expand the number of advisors at New York-based RIA affiliate Savvy Advisors.
The Series A round included investments from Thrive Capital, Brewer Lane Ventures, Index Ventures, The House Fund and Alumni Ventures, bringing Savvy's total VC funding to over $33 million since its launch in 2021.
In an interview with WealthManagement.com, Savvy CEO Ritik Malhotra described starting Savvy with a $7 million seed round from VC investors and some wealth management players like Jordan Park Group. The firm chose to complete its Series A round in two funding tranches, involving existing and new investors.
Both Malhotra (or WealthManagement.com 2024 “10 To Watch” winner.) and Rebecca Lynn, a co-founder and general partner at Canvas, were University of California-Berkeley graduates who formed an initial connection (Savvy and Canvas were introduced by a knowledgeable investor whom Malhotra described as ” pulse checked” in Berkely-related technology and finance investors).
But Canvas was also involved in the 2010s wave of investing in robo-advisors, helping to fund Future Advisor, a robo-advisor that BlackRock eventually bought.
The experience helped Canvas realize that robo alone isn't necessarily the way forward, especially for mid-six-figure and higher-end clients. Canvas also wanted to find funding opportunities for companies applying automation learnings to the needs of middle and back office advisors.
“And that's actually what we landed as well,” Malhotra said. “I think for investors like Canvas, who were part of that first wave with, among other things, robo-advisors, they never had a chance to see this new thesis unfold. There hasn't been much effort to build that adviser-plus-technology approach.”
Specifically, Malhotra plans to allocate the new funds to expand Savvy's software suite and automate more requests for middle and back office advisors. He also wants to expand the support of marketing skills, knowing that advisers often need to do marketing and sales when they can. Additionally, Malhotra intends to increase the number of client services staff to maintain Savvy's high satisfaction scores from advisors and end customers.
As of 2021, Savvy's RIA has grown to 30 advisors managing more than $700 million in assets and is poised to surpass $1 billion by the end of the year. The platform is built around a customized dashboard using AI-powered Co-Pilot CRM, live indexing and investment management tools.
In recent months, RIA added Loyalty as a guardian supports Schwab and advisors from UBS and Farther. Last month, the firm added advisers from Schwab and Mariner (The latter firm is suing its former advisers, accusing them of illegally soliciting client information and allegedly draining Mariner of $60 million in assets.)
According to Malhotra, the firm's investors are planning long-term holdings of 10-15 years. They will look at feedback from advisers on the platform, including net promoter scores and client satisfaction scores. He emphasized that investors understood that the quality of the platform would be the difference in the firm's ability to grow long-term.
Over the next decade, they will continue to evaluate the business fundamentals and efficiency driven by the technology platform.
And with the Series A funding completed, Malhotra said future funding rounds were “less about timing” and more about assessing where the firm stood and what opportunities were available. But he admitted that a Series B was something they would consider for the future.
“It's not off the table in the next two years,” he said.