Quantifeed - 2022 Q1

  • In Q1 2022, the Company's revenue was $1.49 million, which is a 16% decrease from the previous quarter and a 92% increase from the same period last year.
  • In Q1 2022, the Company’s gross profit was $1.47 million.
  • In Q1 2022, operating expenses were $2.62million, which is a 7% increase from the previous quarter and a 20% increase from the same period last year.
  • In Q1 2022, the Company’s net loss was $1.16 million.
  • As of March 31, 2022, the company's remaining cash and cash equivalents were $3.29 million.The company will receive the amount of $11.75 million after its series C round in May.

Company Overview

Founded 2013
Sectors Digital Wealth Management Solutions, Robo-advisor
Address Hong Kong, China

Management Team

Alex Ypsilanti CEO
Ross Milward CTO
Audrey Wong COO&CFO
John Robson CCO
Robert Rice CSO

Notes: the Company hired Robert Rice as their new Chief Sales Officer in Q1 2022.

Board of Directors

Alex Ypsilanti CEO and Co-Founder
Ross Milward CTO and Co-Founder
Kotsuki Kaede LUN Partners Group (Series A)
David Sun Cathay (Series B)
Harshendu Bindal Legg Mason (Series B)
(Not appointed yet) Board representative of Series C
(Vacant) Co-appointed by the Board of Directors

Business Overview

Corporate Structure

Past Financings

Date Rounds Amount ($ m) Price ($) Investors
2014-2016 Convertible Note $1 NA NA
2016-06 A $4 0.82 LUN Partners Group
2018-06 B $10 2.39 Cathay United Bank, Legg Mason
2020-07 B+ $6 2.45 Legg Mason
2022-05 C $11.75 2.20 HSBC Asset Management, Daiwa PI Partners, LUN Partners Group, Franklin Templeton

Financial Analysis

During Q1 2022, the Company’s revenue was $1.49 million, which is a 16% decrease from the previous quarter and a 92% increase from the same period last year.

2021 – 2022 Quarterly Revenue

(in thousands of dollars)

Customer revenue was more diversified in 2022, with the top 6 accounts accounting for 77% in Q1 2022 (compared to 82% in 2021). New customer in Q1 2022 included Standard Chartered Bank, IPS and Livi, which contributed 23% of revenue.

2022 Q1 Revenue Breakdown

(in thousands of dollars, %)

In Q1 2022, the Company’s gross profit was $1.47 million, which is a 16% decrease from the previous quarter and a 90% increase from the same period last year.

Q1 2022 operating expenses were $2.62million, which is a 7% increase from the previous quarter and a 20% increase from the same period last year. The increase in expenses was mainly related to the increase in employee salaries and benefits. As of the end of April 2022, the company has about 86 headcounts, an increase of 9 compared to the end of 2021. Employee salaries and benefits in Q1 2022 were $2.2 million, accounting for 84% of total expenses, an increase of 6% from the previous quarter.

2022 Q1 Expenses Breakdown

 (in thousands of dollars)

The Company’s net loss was $1.16 million in Q1 2022.

As of March 31, 2022, the company’s remaining cash and cash equivalents were $3.29 million. The company will receive the amount of $11.75 million after its series C round in May.

Recent Developments

Business Development

As of the end of April 2022, the company’s assets under management (AUM) were US$3 billion, an increase of US$400 million from the end of the previous year; the number of actual revenue-generating customers reached 14.

Financing

In May 2022, the Companies has completed its Series C funding round led by HSBC Asset Management and joined by Daiwa PI Partners and current shareholders, including global asset manager Franklin Templeton and global investment firm LUN Partners Group. The total raised amount was $11.75 million.

Potential Acquisition

The Company is accessing a potential acquisition opportunity to further strengthen the growth momentum. The Company is considering entering into Term Sheet by end of June.

Sales Pipeline

In 2022 Q1, the Company has further grow its strong sales pipeline. By end of March, there are 130 active opportunities, 5 of which is in contracting phase.

New Appointment

The Company hired Robert Rice as Chief Sales Officer, who will lead Quantifeed’s sales strategy and works with clients to define and deliver digital wealth management solutions.

Based in Hong Kong for over 15 years, Robert has held sales leadership roles in APAC and EMEA at London Stock Exchange Group (formerly Refinitiv), Fitch Solutions, OFX and SNL Financial, leading teams servicing wealth managers, asset managers and financial institutions.

His career is focused on brining innovative platforms, products and solutions to market helping clients meet their objectives. Robert is an appointed Mentor for the Hong Kong Fintech Week advising start-ups and market entrants on various topics and go to market initiatives.

Market Overview

 Assets Under Management in the Robo-advisors Segment

Source: Statista

The robo-advisor market in the United States and around the world emerged around 2008. Since 2015, with the entry of traditional financial institutions, the scale of the industry has begun a new short-term expansion. According to statistics from Statista, in 2021, the global scale of robo-advisor assets under management (AUM) will be about $1.43 trillion, and it is expected to exceed $3 trillion by 2026.

In recent years, large traditional financial institutions have transformed into robo-advisors one after another, acquiring a number of independent robo-advisor startups. In early 2022, UBS announced the acquisition of Wealthfront for $1.4 billion. So far, among the top five robo-advisors in terms of assets under management, only Betterment is an independent institution.

The CICC report believes that independent robo-advisors are frequently acquired for the following three reasons:

(1)Internal: under the low-fee model, the high cost of customers acquiring, technology investment and the low customer base lead to diseconomies of scale, which continue to compress its profit margins. The advantage of robo-advisers is to provide low-cost investment solutions. However, the high technology and customer acquisition costs require a large-scale customer base to amortize. For the start-up institutional participants without a customer base, the corporate profits will be dragged down through a long run of accumulation of customers until its capital is exhausted.

(2) Competition: after traditional large financial institutions began to deploy the robo-advisory business, the track became more crowded, and the competition became more intense.

  • Comparison among independent institutions: robo-advisor products are mostly invested in ETFs, and the fee rates and performance of each institution cannot be significantly different.
  • Comparison between independent institutions and traditional institutions: traditional institutions rely on years of operation and have accumulated advantages in terms of capital, underlying assets, customer base, sales channels and brands, while self-operated robo-advisors have largely squeezed the share of independent institutions.

(3) External: The acquisition of independent robo-advisors by traditional institutions can help acquire customers and fill the gaps in technical capabilities, and can also generate business synergies. Direct acquisition of robo-advisors can help traditional institutions to serve young and low-wealth customers, inject technological capabilities into the middle and back offices. At the same time, acquistion can also help to combine existing businesses to provide customers with comprehensive financial services.

For independent robo-advisers, there are three ways to strengthen the company’s competitiveness:

(1) Providing technical services: some first-mover robo-advisors have accumulated certain technical capabilities and operational experience, and can provide software engineering and other services for competing wealth management companies and banks.

(2) Innovation and expansion: in the face of competition from traditional institutions, independent robo-advisors can adopt product innovation or diversified financial business expansion to enhance their ability to differentiate themselves.

(3) Cooperation: independent robo-advisors can also open cooperation with other institutions to obtain capital, services, and business increments while maintaining their independence.

Competitors

Sigfig

2007 – San Francisco

Building digital wealth management tools for financial institutions. Providing asset management, asset tracking and optimized revenue distribution services and has managed more than $50 billion in assets.

Financing History

  • Series B: $15M, Bain Capital Ventures, Union Square Ventures
  • Series C: $11M, Union Square Ventures, Bain Capital Ventures, DCM Ventures
  • Venture round: $1M
  • Series D: $33M, UBS, Santander InnoVentures
  • Series E: $50M, General Atlantic

Recent News

  • No recent news.

Wealthsimple

2014 – Toronto

Using algorithms to provide financial advice to users, thereby reducing the high service cost of traditional financial products, without setting financial thresholds. Managed over $5 billion for over 1 million clients in Canada, the US and the UK.

Financing History

  • Seed round: CA$1.9 million, Impression Ventures
  • Series A: CA$30 million, Power Financial Corporation
  • Series B: CA$70 million, Power Financial Corporation
  • Venture round: CA$65 million, Power Financial Corporation
  • Venture round: CA$100 million, Aliianz X
  • Strategic investment: CA$114M, TCV
  • Strategic investment: CA$750M, Greylock, Meritech Capital Partners

Recent News

  • In April, Wealthsimple announced a partnership with Accolade Partners to establish a fund that will primarily invest in VC and growth-stage technology and healthcare companies.

Aqumon

2015 – Hong Kong

Through an intuitive digital process, using machine learning technology to integrate real-time market data, output automated financial asset allocation solutions from strategy to trading for financial institutions. Portfolios cover up to 50+ countries.

Financing History

  • Series A, Alibaba Entrepreneurs Fund
  • Pre-B round, Lenovo Ventures, Wing Lung Bank Family Office

Recent News

  • No recent news.