Newly out of stealth mode, Toronto FinTech startup Obsiido wants to make alternative investments more accessible for Canadians.
Founded last year by a group of financial industry veterans, Obsiido was created out of a realization that alternative investment options are hard for the average retail investor to access.
“You are not investing in the same kind of stuff that high-net-worth and ultra-high-net-worth investors are accessing.”
-Nimar Bangash, Obsiido, CEO
“If you have less than $5 million in financial assets, you are not investing in the same kind of stuff that high-net-worth and ultra-high-net-worth investors are accessing,” said Obsiido co-founder and CEO Nimar Bangash.
Obsiido came out of stealth earlier this year, and is currently running a waitlist as it works to launch its platform. The startup recently secured $815,000 CAD in pre-seed capital to make that happen.
The company’s backers are angel investors ranging from Bay Street veterans to investment industry people. A couple of Obsiido’s angel investors are Ryan Dunfield, the CEO of global alternative investment manager SAF Group, and Adrian Basaraba, the former CFO of asset investment firm AGF Management.
Bangash and Obsiido co-founder Puneet Grewal also come from AGF, while co-founder and CTO Blair Taylor brings startup expertise from his time as a founder and executive at companies like MarketBox.
Obsiido also recently added another co-founder in Sean O’Hara, who is joining as the startup’s chief investment officer. O’Hara has over 30 years of investment experience in Europe and North America, and most recently worked as the chief investment officer at XFO Private Asset Solutions, a Toronto-based alternative investment advisory firm for high-net-worth investors.
Obsiido’s goal is to bring alternative investments “to everyone.” The startup is building a direct investing platform that will provide the opportunity for people to learn about and make alternative investments.
Alternative investments constitute things like private equity or venture capital, hedge funds, commodities, and real estate. Typically, for investors to access investments beyond conventional categories like stocks and bonds, they must be high-net-worth individuals with either a personal income over $200,000 or financial asset net worth in the millions of dollars.
As interest in alternative investments has grown, retail (or non-professional/non-high-net-worth) investors have gained access through portfolio managers that act as accredited investors on individuals’ behalf.
Obsiido plans to take that approach and combine it with a tech-backed platform. Obsiido calls itself the first platform of its kind in Canada that is trying to use technology to broaden investor participation in high-quality alternative investments.
The likes of Wealthsimple and venture firm Georgian have each recently come out with alternative investment offerings as retail investors have become more interested in gaining access to space.
Last year, Wealthsimple rolled out what it called its “Venture Fund” to give retail investors access to invest in the fund of funds of United States venture firm Accolade Partners. Similarly, BMO Global Asset Management recently teamed up with Georgian to launch a fund that allows Canadian accredited investors to invest in a $1 billion USD fund Georgian is in the process of raising.
“Other firms have started to look at this space,” said Bangash, citing Wealthsimple’s fund but noting that venture capital represents just one asset class among an array of alternative investment options.
“What we’re doing is we’re taking our expertise on the investing side, knowing what’s out there, what’s available across all the different alt categories … and we’re combining that with our expertise on the tech side,” said Bangash in the interview with BetaKit. “It’s really not about this being super novel in the sense that nobody else has tried to tackle it, it’s the way in which we’re going for the opportunity.”
Bangash did not expand on the technical aspects of the platform but noted that it will include both investing and education, the latter being an important aspect of “simplifying these types of investments for the general person.”
To be able to launch its investment portfolio and platform, Obsiido has applied with the Ontario Securities Commission (OSC) to be registered as an exempt market dealer, an investment funds manager, and a portfolio manager. These are the registrations required for a typical investment manager dealing in securities.
Pending regulation, Obsiido is hoping to launch its platform and be in-market later this year.
Feature image courtesy Obsiido.