Powder, a fintech startup that launched at the annual T3 conference in January, has raised $5 million in seed funding from 40 Silicon Valley-based venture capital firms and tech executives. Those investors include YCombinator, General Catalyst, Funder’s Club, Elefund, Litquidity Ventures and Script Capital, as well as Jon Xu, a co-founder at FutureAdvisor, and Bryant Chou, co-founder of Webflow.
Powder CEO Kanishk Parashar said the technology now has 20 mid-sized RIA firms signed on, ranging from $1 billion to $100 billion in assets under management. Clients include Catalytic Wealth, which is General Catalyst’s wealth management firm, EPIQ Capital and IEQ Capital. Over $13 billion worth of proposals have been generated since Powder launched.
Powder uses generative AI “agents” to read brokerage/bank and estate documents that come in during a wealth management firm’s proposal process. The technology enriches those documents with missing information, fixes issues and then provides an extract for analysis.
“When advisors meet a new prospect, they get a bunch of documents at some point, and then the advisor tries to demonstrate their value proposition,” Parashar said. “While they do that, they have someone on their team reading all these documents. They could be hundreds of pages of information.”
Powder is trying to solve that manual pain point. Its workflow begins when someone uploads a series of documents from a prospect.
“When it’s uploaded, we use generative AI to read the document, understand what part of the document is valuable, and extract that information out of the document into a format that’s usable to do analysis,” Parashar said. “Firms are telling us that they’re saving 90% of the time that they used to spend on reading those documents.”
Parashar said he and his team got the idea for Powder after they sold their last company, Navigator, to Addepar in January 2021.
“While we were building Navigator and while we were at Addepar, what we realized is that advisors and firms in general—the value of the relationship is the No. 1 differentiator—the trust that they build.”
He said trust is built through interactions and information, but that information is unstructured, such as in documents and conversations.
“Generative AI is able to make sense of unstructured data and turn that unstructured data into leverageable information,” he said.
They launched the technology with AI agents for brokerage/bank statements and estate documents, but the funding will be used to invest in other workflows and use cases.
The company is also launching a chatbot that allows advisors to ask further questions about the same document, such as “What are the total unrealized gains?” or “What are the top five holdings?”
The technology also has hallucination detection to double-check the accuracy of the answers generated by the AI.
“We built a ton of scaffolding around the core generative AI piece to make sure that works.”
Parashar said Powder is different from some of the similar AI tools out there in that it starts very specific, with AI agents doing one task. Then, it broadens the scope over time.
“Instead of building an AI bot that answers everything, we’re taking a more pinpointed approach,” he said. “Over time, we want to build trust for those use cases and add more use cases over time. Eventually, it will be doing almost all the manual work the firms are doing.”
Some fintechs have tried their hand at delivering “AI assistant” type tools. Take Benjamin, for instance, which was launched in 2019 as a tool to streamline back-office workflows for financial advisors. The startup pivoted in late 2020 to become an artificial intelligence-driven end-to-end business support system for RIA firms—or, as the company described it on its website: “The world’s first A.I. assistant created for advisors by advisors.”
The company shut down last year, due to challenges landing enough customers and additional capital.