CapIntel closes $14.2 million CAD Series A to fuel US expansion of wealth management sales platform

CapIntel closes $14.2 million CAD Series A to fuel US expansion of wealth management sales platform

With help of US-based FinTech Collective, CapIntel aims to build on Canadian growth.

CapIntel caters to three of Canada’s Big Five Banks and some of the country’s largest wealth and asset management firms. Now it wants to tackle the United States (US) market.

Over 10,000 financial advisors currently use the Toronto-based FinTech startup’s wealth management sales platform to provide more than two million households with investment advice and services.

“The market’s been primed for tech in this area for a while.”
-James Rockwood, CapIntel
 

In an interview with BetaKit, CapIntel founder and CEO James Rockwood said the company has “found a formula that works in Canada.”

Now, armed with $14.2 million CAD ($11 million USD) in fresh financing led by US-based FinTech Collective, CapIntel has set its sights on expanding south of the border, where it hopes to build on its growth in the Canadian market.

“We’re in a really unique position where we feel we’re at the forefront of a larger industry change, a real focus on customer engagement, real focus on investment products, talking about investment products, [and] delivering more holistic wealth management,” said Rockwood, an accountant-turned entrepreneur.

Given CapIntel’s US ambitions, Rockwood said that having FinTech Collective—a FinTech-focused American firm with market expertise and a strong US network—on its cap table could prove to be an asset.

CapIntel’s “majority equity” Series A round, which included a small SAFE component, closed in May. In addition to FinTech Collective, the round saw participation from Toronto’s Fengate Asset Management on behalf of its investor, the LiUNA Pension Fund of Central and Eastern Canada. The financing brings CapIntel’s total funding to about $16.1 million CAD ($12.5 million USD).

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CapIntel’s sales platform and proposals are designed to improve analysis and presentation for financial advisors and asset managers. Since launching in 2019, the startup has amassed a list of customers that includes IG Wealth Management, Canada Life, and US-based The Pacific Financial Group, after shifting from serving individuals and enterprises to focus primarily on the latter during the pandemic.

The funding round follows a year of growth for CapIntel, which claims to have seen nearly 800 percent revenue growth in 2021. “We had really wide market adoption last year, and that brought us into a really good position,” said Rockwood.

Rockwood credited this growth to a combination of inherent demand for tech in the wealth management space and the COVID-19 pandemic, which forced firms to continue operating remotely and increased their willingness to adopt new solutions.

“The market’s been primed for tech in this area for a while,” said Rockwood. “It’s not something that people have necessarily focused on so much in the past … The pandemic accelerated [that] because the appetite for tech just got bigger.”

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According to FinTech Collective Managing Partner Brooks Gibbins, who cited growth in advised assets under management over the past decade, “the advisor community is regaining its momentum.”

“In an increasingly complex market backdrop of persistent volatility and expansive investment optionality, we are entering a golden era of enhancing digital tools that advisors can leverage across their client experiences,” said Gibbins, who will join CapIntel’s board as part of the round.

According to Rockwood, as a “pure sales platform,” CapIntel’s tech and go-to-market strategy is unique within the wealth management space. The startup’s competition often includes homegrown solutions developed in-house by financial institutions providing wealth management solutions, which the CEO said can be “a bit of a mess.”

Amid the broader downturn in public markets, Rockwood claims that CapIntel’s platform is “resilient to market conditions” given that the company provides information about investments to financial advisors.

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“In downtimes, they need that information sort of more than they need it in the really good times,” said Rockwood. “In good times … your general customers aren’t asking for as much information [or] as much detail—they don’t have as much anxiety and focus around [their investments] as they do when times are bad.”

Given these conditions—which have spread to private markets and led other Canadian tech firms to lay off staff in an effort to preserve cash—Rockwood said CapIntel plans to be as efficient and measured as possible in its deployment of this capital.

At the same time, CapIntel plans to add “at least” 150 new employees to its 50-person team over the next two years, as the startup looks to build out its sales and product teams to meet the needs of the big enterprise clients it has been onboarding.

“We see that larger team growth being underpinned by strong fundamentals within the business, strong ability to secure enterprise deals—large enterprise deals—consistently,” said Rockwood.

Feature image of James Rockwood, courtesy CapIntel.

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Author: George Holt