MarketsFlow will soon be launching their second crowdfunding campaign on Crowdcube. We spoke to the Founder and CEO, Tom Nash, to find out what they have achieved since their last crowdfunding raise and what they've got planned for the future.
Can you tell us a bit about MarketsFlow?
MarketsFlow is authorised and regulated by the Financial Conduct Authority (FCA) and the U.S Securities and Exchange Commission (SEC) as an investment manager based out of London and Boston.
We use a proprietary and multi-award-winning technology platform to manage the portfolio performance for our clients, who can open their investment accounts with us for managed portfolios (GIA), ISAs (only available in the UK) and IRAs (Investment Retirement Account in the US).
We manage all of our portfolios in-house and ensure that they are optimised for returns and risk ratios, hence in times of volatility we have the ability to limit client capital exposure to the risky assets.
To illustrate the above point, 2018 was a very testing year for most of the investment managers in the UK and abroad, with the American stock market index, the S&P 500, being down 6.1% for the year. MarketsFlow was able to deliver 8.6% and 25.7% for its Growth and High-Growth model portfolios compared to the majority of other asset managers delivering a negative performance.
We are able to exercise control over the performance metrics of portfolios by applying progressive data synthesis and advanced algorithms to our dataset.
Looking to the future, we want to make our portfolios accessible to everyone, and we plan to launch our new app with accessibility to our portfolios from £10 subject to FCA’s variation of permissions.
How has the business developed since you first raised funds on Crowdcube in 2017?
There has been a lot of progress made since the closing of our round on Crowdcube in Jan 2018.
We opened MarketsFlow Inc, our US subsidiary in Boston in February last year. In March’ 18, we filed for DFSA authorisation with plans to expand to Dubai. In June, we received our SEC filing as a Registered Investment Advisor. At the end of September’ 18, we received our FCA authorisation as an investment adviser and manager to service retail and institutional clients. In December, we received our HMRC approval as an ISA manager.
We have been onboarding clients in the US and the UK from December of last year.
In Feb ‘19, we won “Best technology for Programmatic Trading” at Fund Technology and WSL awards 2019, having won the award in ‘17 and ‘18.
In March of this year, we filed for our second variation of permissions with the FCA to enable MarketsFlow to hold client money, allowing us to lower our minimum capital requirement for clients.
Last year, Marketsflow was approved by the SEC as a Registered Investment Advisor and was authorised by the FCA as an Investment Advisor and Investment Manager. What impact has this had on the business and what will it enable you to do in the future?
MarketsFlow as an asset manager comes under strong scrutiny for compliance and regulatory framework in the financial industry across different regions. This can pose significant challenges and at the same time offer limitless opportunities.
By having the regulatory framework in place, it enables us to serve a large client base both in the UK and the US. On top of that, we are consistently looking to innovate, by democratising the access to portfolios for everyone.
As we look to the future, we see MarketsFlow playing a bigger role in developing its range of scientifically managed portfolios and enabling the access of such portfolios to a new breed of investors.
You now operate in the UK and the US, where do you see the expansion of Marketsflow going next?
We are still in our early development stage and constantly learning about the two regions where MarketsFlow already operates.
Even though we are based in the UK and the US, in terms of R&D, operations and marketing the UK is home to our headquarters. We mainly offer account management services from the US.
We see great potential in both regions with different client needs, so we are constantly adapting our offering to anticipate and meet those needs.
In the short term, we see a higher potential of organic acquisition of clients in the UK, and growth via M&A and partnerships in the US. This may shift as we look to drive our future funding and growth from the US.
You have an upcoming second raise on Crowdcube, what will the funds from that round be used for?
The new funding round, which will be announced soon, will be used to accelerate our growth using technology and client acquisition strategy as set out below.
The funds will be used to deliver on our growth strategy by investing in technology. This will cover our core technology assets – MarketsFlow proprietary platform, website and the mobile app. The mobile app will drive our accelerated distribution by offering enhanced visual engagement and virality.
Growth by organic and no-organic client acquisition strategy for MarketsFlow. The organic strategy will cover growth of our accessible portfolios from £10. Depending on the growth we will look to package our portfolios into Undertakings for Collective Investments in Transferable Securities (UCITs) or Equity Traded Fund (ETFs) for a wider third-party distribution network. The non-organic growth will include M&A and partnership deals, by seeking complimentary (Registered Investment Advisor) RIAs or Independent Financial Advisors (IFAs) in the US and the UK.
We will also be using the funds for regulatory filings and expansion to other regions like Dubai and the Far East.
What’s next for Marketsflow?
We have come a long way in the last 12 months, and we expect the next 12 months to bring accelerated growth to MarketsFlow.
We plan to launch our new app with accessibility to portfolios from just £10, coupled with a simple, under 10 minutes sign up process. Prior to this, our minimum capital requirements were £25K for Managed Portfolios and £5K for ISAs.
We see this as a game-changing strategy as we enable accessibility to our portfolios for everyone. We hope that this will drive forward an appetite for investing and awareness for the general public. As part of the new app, we want to develop visual simulation elements to drive user-engagement and financial planning for our clients.
We also plan to expand MarketsFlow to Dubai and file for regulatory permissions in Singapore. We will continue to build momentum with our client acquisition strategies for organic and non-organic growth.
We will be launching further portfolios to address a wider target audience and package some of the portfolios into UCITs and ETFs.
We also plan to run further funding rounds, to continue the momentum and growth of MarketsFlow, as an established player in managing scientifically driven optimised portfolios.
You can pre-register to invest in MarketsFlow before they launch publicly, here.
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