InvestCloud has completed a recapitalisation that values the wealth platform at $1 billion. As part of the deal, two additional businesses are being rolled into InvestCloud, immediately pushing the valuation of the combined business up over $2 billion.
The deal has the potential to reshape the wealth and asset management sector by bringing a diverse ecosystem, including many of the world's largest fund manufacturers and distributors, together on a single modern SaaS cloud platform.
InvestCloud now has over $4 trillion of assets on its platform and revenues over $285 million. Headcount has risen to 900 people, as its sales footprint expands considerably, adding office locations and local expertise in continental European and Asian markets.
The financial and corporate manoeuvring behind the deal seems designed to focus InvestCloud for further growth and a potential IPO in the near future. John Wise, founder of InvestCloud, confirmed his ambition to build a global financial supermarket during an exclusive interview with FinextraTV.
New financial investors were led by Motive Partners and Clearlake Capital, a Santa Monica based PE firm.
Created by former Capco founder Rob Heyvaert, Motive Partners has a track record of scaling financial technology businesses. Motive contributed its portfolio businesses, Tegra118 and Finantix, with a view to create a next-generation SaaS wealth solution using InvestCloud's cloud platform as its core.
At a senior management level, John Wise remains chief executive officer of InvestCloud. Rob Heyvaert becomes chairman. Cheryl Nash of Tegra118 becomes CEO of InvestCloud's financial supermarket division and Christine Mar Ciriani of Finantix becomes the CEO of the private banking division. Both join the global InvestCloud management team, reporting to Wise.
InvestCloud will now organise its business to serve clients through four distinct market opportunities for its unique and proven platform capability within the wealth and asset management arenas:
- Wealth Advisor Platform - with over $2 trillion AUM already, the InvestCloud platform will continue to build upon its success in North America, the UK, continental Europe and Asia.
- Private Banking Platform - using the Finantix product as its core, InvestCloud will offer an international private banking platform using its proven technology.
- Financial Supermarket - using the Tegra118 product (already $2 trillion AUM), and its extensive network of existing distribution relationships with asset managers, broker-dealers and custodians, InvestCloud will continue to build an international financial supermarket to connect manufacturers (asset managers) to distributors (wealth managers).
- Custom Financial Platform - using the hyper-modular cloud platform, clients can truly design and build unique Intellectual Property (IP) using InvestCloud’s design-first methods and AI PWP (Programs Writing Programs)TM to create cloud solutions.
“The recapitalization achieves our first objective,” says John Wise, InvestCloud’s co-founder and CEO.
“At a valuation of $1 billion, we can reward early investors in the business, while injecting new capital to fuel the next stage of our growth, further supporting our clients' needs. Crucial to our ultimate objective - which is to build the world’s largest financial supermarket - is the partnership with Rob and the Motive team, Clearlake and the Tegra118 and Finantix businesses.”
Wise continues, “Tegra118 has the largest integrated platform in the US, with fund sponsors (asset managers: 9 of the top 12 in the USA) connecting to distributors (wealth managers: 7 of the top 10 Broker Dealers in the USA) for financial products. Combining this with the Digital Platform of InvestCloud provides the best-in-class digital advice to Advisor Networks and Advisors. With our existing clients, InvestCloud will now build a worldwide financial supermarket using Tegra118 as the base. Finantix adds further strength in Europe and Asia - particularly in the private banking space - to fulfill our ambition to distribute the InvestCloud platform and our collective solutions globally.”
“Huge forces are impacting the wealth sector,” says Rob Heyvaert, founder and managing partner, Motive Partners and chairman of InvestCloud. “Whether it’s demographics, democratization or disintermediation, the sector will change massively in years ahead. We believe the use of InvestCloud’s cloud technology and platform with our existing assets (Tegra118 and Finantix) will determine the winners. This investment, and the commitment of two of our existing businesses and their exceptional talent, creates a global wealth platform provider that has proven technology with the ability to scale and serve the needs of our global clients and their customers through existing, new and hyper-personalized solutions.”
"Wealth managers are faced with several operational complexities, including increased demand for tailored, diverse investment products as a result of the shift towards open banking," says Behdad Eghbali, co-founder and managing partner, and James Pade, partner, of Clearlake. "We believe InvestCloud's leading software solutions, in combination with Finantix and Tegra118, uniquely position the company to address these trends and deliver significant value to its global customer base."