When you think about investment management an image of a traditional, white-shoe firm with mahogany furniture may come to mind, rich with years of investing history. However, today’s consumers are a bit more discerning in their choices for investments and investment managers. Titan is the investment management platform catered towards the needs of these next-generation investors. Founded in 2018 by a number of finance executives, Titan leverages technology and innovation to democratize investment opportunities in a transparent manner; many of these opportunities previously were only reserved for those with private wealth managers. The firm has a growing number of open-access actively-managed investment strategies across different asset classes including crypto. As the pandemic fueled a surge in interest in active investing, Titan company was able to grow 500% in the last twelve months and expects to have $1B AUM by the end of 2021.
AlleyWatch caught up with Cofounder and Co-CEO Joe Percoco to learn more about the state of the investment management industry, the company’s strategic plans, latest round of funding, and much, much more.
Who were your investors and how much did you raise? Was it seed, Series A, B, etc?
We raised a $58M Series B, bringing our total funding to $75M. The round was led by Andreessen Horowitz, and General Partner Anish Acharya joined our board. General Catalyst (who led our Series A) also put money in the Series B round, along with BoxGroup, Ashton Kutcher’s Sound Ventures, and a group of professional athletes and celebrities including Odell Beckham Jr., Kevin Durant, Jared Leto, and Will Smith.
Tell us about the product or service that Titan offers.
Titan is the first direct-to-consumer investment platform designed for the everyday investor who wants their capital actively managed by a team of investment experts. What Fidelity and its iconic mutual funds were for baby boomers, Titan is for new generations.
In simple terms, the mutual fund or an ETF is fundamentally just a piece of technology for an investment manager to accept money from someone (let’s call this person Ross) in order to invest in securities (like a basket of stocks).
We think this piece of technology is like a VHS tape. It does the job but it’s archaic for a few reasons:
- The investment manager can’t talk to Ross – a mutual fund is a black box.
- The investment manager has no idea who Ross is. When you buy an ETF, you’re just an anonymized dollar value.
- These products have layers of costs, have high minimums, and are difficult to create.
E.g., the factory that creates the mutual fund itself is very old. Believe it or not, the entire investment management industry (i.e., the use case of someone giving their money to an investment expert) is predicated on these VHS tapes. These are the archaic technologies being used. We’re rebuilding it entirely. Fidelity is an old factory. Titan is effectively a new factory.
After starting our careers in finance, we saw the problematic and stark divergence in how the investment-management industry is accessed by everyday Americans compared to those who are wealthier. We were telling our own family and friends to invest in the “bland menu” of ETFs and mutual funds because they couldn’t afford a wealth manager. Meanwhile, accredited investors had a “secret menu” of hedge funds, VC, etc. This divide frustrated us, so we built Titan.
How is Titan different?
While DIY platforms like Robinhood, Webull, Public, etc. allow consumers to trade individual stocks on their own, when you invest with Titan, our team invests your capital on your behalf. With regular updates and research on your portfolio, we’re at the intersection of passive investing and active investing where you are in the loop of investing decisions – you’re riding shotgun – but you don’t have to make the decision yourself. At Titan, we’re building a platform to let the brightest investment analysts in the world manage your money for you. We are focused on outperforming the market and we’re focused on being an open box and showcasing how an investment manager operates behind the scenes.
What market does Titan target and how big is it?
We’re focused on millennial and Gen-Z wallet share. Liquid assets are roughly over $1T, tracking to 10x in the next 5-7 years.
What’s your business model?
Direct to consumer, advisory, and SaaS fee-based
How has COVID-19 impacted the business??
Accelerated. Revenue 6x’d in 2020 from a surge in retail investing demand. When market volatility strikes, the need for an investing authority in your pocket dramatically increases.
What was the funding process like?
Quick and unprovoked!
What factors about your business led your investors to write the check?
- Market potential: The asset management platforms of the past have Airbnb-sized impact and public market cap
- Team: Incredible founder-problem alignment + significant data points of relentless DNA to run through walls
- Traction: Explosive growth
- A clear why now: Consumer preferences are changing, especially in the younger generations where there is a desire to be involved and connected to your investments but there is a lack of access to education
What are the milestones you plan to achieve in the next six months?
Cross $1B in AUM.
Launch the first actively managed crypto strategy available to non-accredited and accredited investors alike.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Move insanely fast. Anything that you think should take a month, ship it in a week. Anything that one thinks should take a week, think about how it can be done in a day.
Where do you see the company going now over the near term?
Hiring best-in-class people to continue to build out our investment products, client experience, and tech.
What’s your favorite outdoor dining restaurant in NYC
Emmett’s Pizza in Soho. Highly recommend their pepperoni deep dish. I know there are Prince St. Pizza and Artichoke loyalists. Team Emmett’s for me.