Fintech platform provider (and RIA owner) Savvy Wealth has wrapped a $26.5 million Series A funding round, buoyed by a $15.5 million funding push led by the venture capital firm Canvas Ventures.
The firm plans to use the funds to expand its artificial intelligence-powered tech platform, boost the expertise of its product and development teams and expand the number of advisors in its New York-based affiliated RIA, 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 it launched in 2021.
In an interview with WealthManagement.com, Savvy CEO Ritik Malhotra described Savvy’s start with a seed round of $7 million from VC investors and some wealth management players like Jordan Park Group. The firm opted to complete its Series A round in two tranches of funding, including existing and new investors.
Both Malhotra (a WealthManagement.com 2024 “10 To Watch” winner) and Rebecca Lynn, a co-founder and general partner at Canvas, were alumni of the University of California-Berkeley, which forged an initial connection (Savvy and Canvas were introduced by a Savvy investor who Malhotra described as “checking the pulse” on Berkely-affiliated tech and finance investors).
But Canvas was also involved in the 2010s wave of investing in robo-advisors, having helped fund Future Advisor, a robo-advisor BlackRock eventually purchased.
The experience helped Canvas realize that robo-only is not necessarily the way forward, particularly for mid-six figures and higher clients. Canvas also wanted to find funding opportunities for companies applying the lessons of automation to advisors’ middle- and back-office needs.
“And that’s effectively what we landed on as well,” Malhotra said. “I think for investors like Canvas, who were part of that first wave, among others, with robo-advisors, they never got a chance to see this new thesis play out. There haven’t been many attempts at building that advisor plus technology approach.”
Specifically, Malhotra plans to allocate the new funding to expand Savvy’s software suite and automate more middle- and back-office advisor requirements. He also wants to expand the marketing capability support, knowing that advisors often must do marketing and sales when they can. Additionally, Malhotra intends to boost the number of client services associate staff to retain Savvy’s high satisfaction scores from advisors and end clients.
Since 2021, Savvy’s RIA has grown to 30 advisors managing more than $700 million in assets and is poised to exceed $1 billion by the end of the year. The platform is built around a custom dashboard using the AI-powered CRM Co-Pilot, direct indexing and investment management tools.
In recent months, the RIA added Fidelity as a custodian alongside Schwab and advisors from UBS and Farther. Last month, the firm added advisors from Schwab and Mariner (the latter firm is suing its former advisors, accusing them of illegally soliciting client information and allegedly losing Mariner $60 million in assets).
According to Malhotra, the firm’s investors are planning 10- to 15-year long-term holds. They will look at the feedback from advisors on the platform, including net promoter scores and customer satisfaction scores. He stressed that the investors understood that the platform’s quality would be the differential in the firm’s ability to grow long-term.
Over the coming decade, they will continue to assess the business fundamentals and efficiency driven by the tech platform.
And with the Series A funding completed, Malhotra said future funding rounds were “less about the timing” and more about evaluating where the firm stood and what opportunities were available. But he acknowledged a Series B was something they’d consider for the future.
“It’s not off the table in the next couple of years,” he said.