London-based startup hopes to cash in on popularity of customisable direct indexing trend as major players get in on the scene
(AF) Fintech startup C8 Technologies has raised $7 million in its first round of fund raising as it seeks to capitalise on growing demand for new index-investing platforms.
The London-based firm said the proceeds would be used to scale its technology, which enables retail and institutional investors to replicate indexes in portfolios without having to use pooled structures such as exchange-traded funds (ETFs).
Backers of the fund-raising included Ventura Capital, Alphemy Capital, Bredum, North-East Group and Pinorena Capital.
“We are pleased to receive support from such highly respected investors,” said C8 CEO Mattias Eriksson. “Their support makes it possible to launch our platform in new markets so that more managers and asset owners can access our cost-effective tools.”
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Direct indexing works in the same way as building a playlist on Spotify or any other music streaming service. Investors choose the securities they want from an established index and put them into a managed fund. The products differ from regular funds and ETFs because the end investors owns the individual stocks.
The market has grown in recent years, with even BlackRock, the world’s biggest asset manager, getting in on the act. Late last year it purchased direct index firm Aperia, which has $36bn under management.
While such investment vehicles have been around for many years, they’ve been largely out of the reach of retail investors because they require exposure to a wide range of assets. Technology has helped democratise the sector.
C8 was formed in 2017 and its platform enables investment in S&P Dow Jones Indices, IHS Markit, CICC, Solactive, Morningstar, UB Bankers, Ned Davis Research and SEB.