FundGuard, AI Vendor for Fintech, Gets $12M in Additional Series A Funding
Financial platforms that often serve as harbingers for enterprise technology adoption are rapidly embracing AI-based components to help manage a wide range of investments in the fintech sector. Venture firms have noticed, providing new funding to startups such as FundGuard, developers of an AI-based software-as-a-service platform (SaaS) for investment and asset management.
As part of that trend, New York- and Tel Aviv-based FundGuard announced a $12 million Series A funding round this week led by Team8 Capital and existing investors Blumberg Capital and LionBird Ventures. A group of individual asset managers also participated in the funding round, which boosted the amount capital raised by FundGuard to $16 million.
FundGuard’s AI-based cloud-native platform is designed to replace legacy asset and investment management systems. The startup maintains those aging systems are unable to provide needed real-time capabilities at scale.
"Today banks and managers need to have 10 to 20 different applications to manage a day in the life of a fund," Lior Yogev, FundGuard’s CEO and co-founder, explained in an email exchange. Those applications range from net asset valuation and performance measurement to post-trade compliance and collateral and risk management.
The startup’s asset-servicing technology platform seeks to provide “a real-time, single source of truth for funds,” Yogev added. "Having a single source of truth means that you have one copy of the data and all the functions run off of the same data, eliminating artificial differences and investigations [while] streamlining operations."
The startup is addressing the high cost of maintaining fintech applications associated with integration and data storage as well as upgrades and testing. "Because of the varying systems requirements and/or limitations, there are always differences in the end between the records in these systems which lead to actual mistakes, and to significant reconciliation and investigation work to verify whether the fund financial reports are ultimately accurate," Yogev said.
To help resolve these kinds of issues, the software services platform is designed to help asset managers and fund administrators oversee exchange-traded investment funds as well as hedge, mutual and pension funds. It automates management steps while applying AI to enable data analytics, according to the company.
Investment in startups like FundGuard illustrates how AI is making steady inroads in the financial technology sector as asset managers look to replace legacy systems with broader automation.
FundGuard’s lead investor Team8 backs fintech startups developing AI-based platforms for delivering enterprise software running on cloud infrastructure. The investment company was formed by a group of former Israeli intelligence officers and is reportedly backed by Cisco, Intel and Microsoft.
-Editor's note: This story has been updated with comment from FundGuard.