Public market investors are spoiled for options when it comes to tracking their holdings, from newfangled platforms like Robinhood to incumbents like Fidelity. But markets are shifting, with massive companies such as SpaceX staying private longer, and alternative asset vehicles like private credit growing in popularity. The New York-based fintech startup Arch is building what CEO Ryan Eisenman describes as the “Schwab for private markets”—and it just raised a $52 million Series B led by Oak HC/FT, with participation from Menlo Ventures, Craft Ventures, and Quiet Capital.
While it may be tough to feel sympathy for wealthy family offices and limited partners, or investors in venture capital and private equity funds, they have an undeniably difficult job tracking what can be thousands of investments across different firms, which each have their own portals. Eisenman, who started his career as an analyst at Deloitte, described their plight as “death by a thousand paper cuts.” As a result, it can be cumbersome for private market investors to keep tabs on the status of their capital across different firms, let alone how it’s performing and allocated, outside of Excel spreadsheets.
Eisenman positions Arch as a platform that can sit between the myriad software programs utilized by both investment firms and their backers, from Carta and Juniper Square to Addepar and Black Diamond. Arch is a more customer-facing dashboard that he pitches as a “Switzerland” bridging the various worlds of the modern investor.
Matt Streisfeld, the lead investor from the $5.3 billion venture firm Oak HC/FT, said that Arch appealed to them because of its consumerized feel, especially as private markets swell and attract waves of new investors. He said that the platform is also adding new products to help simplify the relationship between investment firms and their backers, such as facilitating capital calls, or requests to contribute a portion of the capital that LPs have already committed, as well as distributions from successful investments. In the future, Arch could even help support secondary market transactions, where investors trade their private holdings, helping really transform the company into a Schwab-like product.
Arch is quickly growing, with 160 employees and around $260 billion in assets managed by its customers on the platform. But for a company dedicated to private markets, the real billion-dollar question is whether it will pursue its own public offering or be acquired. Streisfeld said that 85% of exits in financial services are sales to strategics, or an acquisition by a similar, typically larger company, pointing to BlackRock’s 2024 purchase of the alternative asset data provider Preqin for $3.2 billion as an example. Streisfeld said that Arch has the scale to eventually IPO. “But I do think in any of those types of markets, being a public company doesn’t always have its advantages,” he added.
Leo Schwartz
X:@leomschwartz
Email:[email protected]
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VENTURE DEALS
- Hala, a Riyadh, Saudi Arabia-based financial services company for micro, small, and medium enterprises, raised $157 million in Series B funding. The Rise Fund and SanabilInvestments led the round and were joined by QED, RaedVentures, Impact 46, Middle East Venture Partners, IsometryCapital, and others.
- Kredete, a New York City-based fintech company designed to help African immigrants build credit and access financial services, raised $22 million in Series A funding. AfricInvest and Partech led the round and were joined by Polymorphic Capital.
- Meela, a New York City-based developer of an AI voice companion for seniors, raised $3.5 million in seed funding. BainCapitalVentures led the round.
- PascalAI, a Bangalore, India-based AI platform designed for investment management, raised $3.1 million in seed funding. KalaariCapital led the round and was joined by Norwest, InfoedgeVentures, Antler, and angel investors.
EXITS
- F5 agreed to acquire CalypsoAI, a New York City-based AI security platform, from PaladinCapitalGroup for $180 million in total considerations.
PEOPLE
- BoxGroup, a New York City and San Francisco-based venture capital firm, hired HolleyMcShan, AvaPayman, and ArielleRothman as investors. Previously, McShan was with PearVC, Payman was with GoldmanSachs, and Rothman was with BCG.
- HoxtonVentures, a London, U.K.-based venture capital firm, hired RishabhKaul as venture partner. Previously, he was with Appsmith.
- ThriveCapital, a New York City-based venture capital firm, hired PatrickHsu as a venture partner. He currently also serves as co-founder and core investigator at the ArcInstitute.