Republic Capital Group, a boutique investment bank that primarily advises wealth and asset managers on deals, revealed Monday that it made its first-ever investment in a fintech company.
The investment bank headquartered in Houston is now a minority stakeholder in Creativemass. The fintech company’s flagship product, WealthConnect, is a wealth and asset management platform built to be used with the Salesforce Financial Services Cloud. The company says WealthConnect is capable of replacing a client relationship management or CRM system, portfolio management software, financial planning, risk and compliance, and other tools.
In addition to wealth and asset managers, broker-dealers, insurance, mortgage, and accounting firms can also benefit from using the software.
Details of the bank’s investment in Creativemass were not disclosed.
All of the components of WealthConnect are consolidated and viewable in the software’s advisor dashboard. “Gone are the days of relying upon complex, proprietary, closed and costly systems to deliver an effective Financial Services solution,” Creativemass says on its website.
Creativemass was founded in 2017 specifically to leverage and function with Salesforce. It has six offices across Australia, the United Kingdom, and the U.S. Existing clients include some of the largest wealth management firms operating in those countries.
“A number of software firms have built multi-billion dollar firms sitting on top of Salesforce, so this is a well-worn path to success,” John Langston, the founder and managing director of Republic Capital Group, told RIA Intel. A recent example of this business strategy in action is nCino, a bank operating system used by Santander, TD Bank, Navy Federal Credit Union, and others.
“I believe [Creativemass] could change the software game in wealth and asset management,” Langston said.
Langston has personally made small investments in companies in the past, but Creativemass was the first for Republic Capital. The investment bank had been looking for an opportunity to invest in a fintech company and feedback on Creativemass from the bank’s clients and prospective clients helped it decide to become a stakeholder. Langston will also become a non-executive board member at Creativemass.
The banker said he sees no conflict of interest between Republic Capital’s clients and the investment in Creativemass because the bank advises on transactions; it is not a consultant to clients on their technology stack. For comparison, Langston said he would never invest in an RIA, which would be competing with the bank’s clients. The bank represents both buyers and sellers.
“The investment from Republic Capital Group represents an important strategic partnership as the company expands into the U.S. market,” Michael Rouse, the founder and managing director of Creativemass, said in a statement.
Venture capital investments in fintech startups plummeted in the first quarter — there were only 20 deals and deal value was down 75% year-over-year to $178 million. But companies promising to consolidate software services used by wealth managers continued to launch and raise money then and during the second quarter.
In March, “three incredible tailwinds” persuaded Sequoia Capital to lead a $14.5 million Series A round of funding for Vise, an AI-driven portfolio management system.
Pulse360, a real-time, remote and in-person meeting documentation system that promises to make advisors 10 times more efficient, launched in early May. TradingFront, a software intended to replace an RIA’s client onboarding, portfolio management, CRM, reporting, and other systems, potentially saving them thousands of dollars each year, also launched last month.
Other companies have set out to wrap commonly-used software by financial advisors into one offering, too.
Altruist, a new digital, commission-free custodian for RIAs that emerged last year, says it will replace much of the existing software needed to run an advisory business. If it does, many of the technology intermediaries will become irrelevant, according to its founder.