Savvy Wealth raises $7.3 million for its next-gen wealth management company that’s fueled by automation

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Fintech innovation has spread to the wealth management industry and this technology-enabled transformation has led to a new class of companies that are focused on what is known as WealthTech. New entrants focus on bringing the latest technologies to portfolio planning, portfolio management, automation, and compliance workflows. Most are marketed to existing wealth management companies to help them adapt to the needs of today’s consumers. Savvy takes a different approach with its next-generation asset management firm that leverages technology from the ground up to deliver holistic wealth management solutions to both its advisors and their clients. Through investments in product development and research, the company estimates that wealth managers can quadruple their income working at Savvy through efficient customer service and time. The firm is actively recruiting wealth managers and their portfolio companies, seeking to acquire existing wealth management companies, and expecting $100 million in assets under management over the next six months.

Alley Watch met the co-founder and CEO of Savvy Wealth Ritik Malhotra to learn more about how the fragmentation and lack of adoption of technology in the wealth management industry inspired the company, the company’s strategic expansion and hiring plans, the recent fundraising round and much more…

Who were your investors and how much did you raise?

Savvy closed $7.3 million seed funding co-led by Index Ventures and prosperous capital. Other investors in the round include the founders of ICONIQ, Plaid, Instacart, Figma, Opendoor, Flexport, Newfront and EPIQ, as well as companies such as Jordan Park, A* Capital, Box Group, Operator Partners, GFCand more

Tell us about the product or service offered by Savvy Wealth.

Savvy is the next-generation wealth management company that supercharges its wealth managers with enhanced software, sales and marketing automation, and back-office services. Our model is to hire wealth managers with business books and to acquire wealth management companies and equip them with our tools and services. We provide immense growth opportunities for our Wealth Managers by building software that drives automation and efficiency so Wealth Managers can have more bandwidth to focus on client services and revenue growth.

What inspired the launch of Savvy Wealth?

We have noticed that over the past decade, and especially since the onset of the pandemic, the wealth management industry has not been adopting technology as quickly as the general public. A lot of wealth managers still don’t offer digital communication beyond email and still do financial planning manually. We started Savvy to create a technology-driven wealth management company where we equip our wealth managers with advanced tools and services to grow their business, expand their customer base and allow them to spend more time with clients .

How is Savvy Wealth different?

Over the past decade, wealth management has evolved from an asset management activity (for example, managing a simple equity portfolio) to a comprehensive financial planning and execution activity. Savvy is well positioned to combat industry fragmentation and help advisors use modernized technology solutions to deliver immense scale and growth at every stage of the advisor flywheel.

Which Savvy Wealth target market and how big is it?

As a wealth management firm, we target the US wealth management industry, which generates $545 billion in annual revenue.

What is your business model?

We hire wealth managers with a portfolio of cases and acquire wealth management companies that charge clients fees for financial planning, ongoing advice, investment management, and more. A portion of these fees accrues to the Wealth Manager and a portion to Savvy. We align incentives on all Wealth Managers we hire/acquire in this way: by helping grow our Wealth Managers’ business, we increase our revenue.

What are your post-COVID office plans?

We operate in a hybrid office model and currently have an office in Manhattan. We hire both in-person in New York and remotely anywhere in the United States. We bring all remote employees to NYC headquarters twice a quarter for five days to build team camaraderie. (That translates to about 11% time spent in New York and 89% remote.) Half of our team is currently in New York and the other half is remote.

We operate in a hybrid office model and currently have an office in Manhattan. We hire both in person in New York and remotely anywhere in the United States. We bring all remote employees to NYC headquarters twice a quarter for five days to build team camaraderie. (That translates to about 11% time spent in New York and 89% remote.) Half of our team is currently in New York and the other half is remote.

How was the funding process?

We spent a lot of time validating the market and our vision before launching the fundraiser, which allowed us to have a clear and convincing argument. We spoke with investors who were fintech-focused, had built fast-growing businesses, or had experience in the wealth management industry and we were fortunate to have a world-class team of companies and individuals who invest in Savvy.

What are the biggest challenges you have faced when raising funds?

Finding the right partners to work with was the biggest challenge and we spent a lot of time thinking about it. We are very fortunate to have a round co-led by Index Ventures and Thrive Capital, two top companies that have invested in iconic software companies. Mark Goldberg of Index Ventures and Karim Zaki of Thrive Capital are the two partners who carried out the operation; they both have extensive experience in investing and building fintech and tech companies.

What factors about your business made your investors sign the check?

We are targeting a massive industry that is ripe for technological disruption. The combination of a huge market that has been difficult to break into with technology, our unique approach of acquiring wealth managers and supercharging them with software and services, and our past track record of creating, growing and Selling tech companies in the past provided a compelling combination of factors that drove them to invest.

What milestones do you expect to achieve in the next six months?

We plan to:

  • Have $100 million in assets under management by hiring and acquiring wealth managers
  • Internally launch our end-to-end digital platform for our wealth managers to manage and grow their business.
  • Continuously help the wealth managers we hire and acquire to grow their revenues and improve their operational efficiency.

What advice can you give to New York businesses that don’t have a fresh injection of capital into the bank?

Continue to focus on proving product-market fit. The more evidence you can collect (paying customers, waitlist interest, customers using the product, customer feedback, etc.), the closer you’ll be to creating something people want. Fundraising will be a natural result of this (if that’s what you want to do).

Continue to focus on proving product-market fit. The more evidence you can collect (paying customers, waitlist interest, customers using the product, customer feedback, etc.), the closer you’ll be to creating something people want. Fundraising will be a natural result of this (if that’s what you want to do).

Where do you see the business going now in the short term?

We plan to rapidly scale the business and significantly increase assets under management through more wealth manager hires and acquisitions this year, as well as grow the team to continually improve our product and our technology. We also plan to build our market presence with clients later this year to deliver a compelling digital wealth management solution for high net worth individuals.

What’s your favorite outdoor restaurant in New York?

It’s hard to choose just one! Ivan Ramen is great for ramen, CAVA is a go-to for quick bowls, and the patent pending has some of the best cocktails ever made.


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