Last May, Vise, a portfolio management software startup, raised a $14.5 million Series A round of funding led by Sequoia Capital, a storied venture firm in Silicon Valley. With it, the founders began hiring employees and building a service they believe will transform how financial advisors do business.
Wealth managers can use Vise to build highly customized portfolios for clients by investing in individual stocks, then Vise uses artificial intelligence to help manage those portfolios for a fee. Advisors are increasingly outsourcing some or all of their investment management duties (a practice most should be doing) in favor of spending more time with clients and growing their businesses. Some were already turning to Vise as wealth managers had signed discretionary manager agreements and were in the process of onboarding as much as $800 million in assets, the company told RIA Intel.
[Like this article? Subscribe to RIA Intel’s’ thrice-weekly newsletter.]
By September, Vise had grown to more than 25 employees, including Yoonie Kim to be vice president of People & Talent, a 20-year human resources and recruiting veteran who previously worked for Dropbox, Codecademy, Google, and other companies. It also added a former director of Product at point-of-sale lender Affirm, and a former BlackRock executive to oversee compliance, and planned to have 50 employees before 2021.
Vise raised a $45 million Series B round in December, also led by Sequoia, bringing its total raised to $60 million, and it continued its high-profile hiring spree. In January, Dave Twardowski, a computer scientist who previously worked for American Century Investments’ Avantis Investors and Dimensional Fund Advisors, joined as a vice president and the head of Investment Strategy. That same month, Andrew Fong, a former vice president of Infrastructure Engineering at Dropbox, joined Vise to become its chief technology officer.
The startup said it plans to have at least 100 employees before this summer, like it predicted.
But regulatory filings last week show a gap between the assets Vise said were being onboarded and what have been added. Vise is managing $144 million, well below the $800 million it said it had in the pipeline last spring.
Samir Vasavada, who founded Vise with Runik Mehrotra in 2016 initially as an investment research platform, said the gap is not a good indicator of his company’s performance thus far.
“It’s not about the specific number. It’s about the track that Vise is on,” Vasavada told RIA Intel. “If we looked back on our primary goals of the company last year, we achieved those.”
All of 2020 was about hiring the “best” people to work for Vise, scaling the company, and continuing to improve its tools, according to Vasavada. Those things needed to be the focus at the start, if the company intends on eventually managing “hundreds of billions of dollars” for advisors like it plans to.
Vasavada said he and Mehrotra are also adjusting to being executives at the company and not just people building the product. As its leaders, assembling the right team during the pandemic has also been time consuming for them.
And Vise has grown more quickly in recent months. Since it raised capital in December, its assets under management have doubled to more than $144 million and the number of investor portfolios it is managing has also doubled. The company did not share how many RIAs are using it to build portfolios, but existing RIAs are using Vise more and it is adding more.
The Covid-19 pandemic accelerated trends in the wealth management industry and Vise is benefiting. The pipeline is as strong as ever and growth is accelerating as Vise continues to refine its platform, Vasavada said.
“We’ve been able to build the product really quickly,” he said. “The product we have now is probably one of the best products in the industry.”
Michael Thrasher (@Mike_Thrasher) is a reporter at RIA Intel based in New York City.