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As FundGuard celebrates our five-year anniversary, Lior Yogev, CEO & Co-Founder reflects on the company’s growth and our promising future.
It has been five years since we officially launched FundGuard, and I have had the pleasure this week of bringing the entire FundGuard team to Tel Aviv to celebrate our accomplishments and plan for our bright future ahead. I am pleased to also have several of our clients visiting and collaborating this week.
Reflecting now on our celebration and leadership team offsite – having spent time together as a global team that’s twice the size it was just a year ago – we’ve naturally been thinking about what we’ve achieved and what we’ll be doing next. We have funding, we have active engagement from strategic partners and clients like Citi and State Street and we’ve built an incredible team.
The process of completing any funding round is a lengthy and complex one. Our Series A round of of $12M was in February 2021, but the scale and speed of our growth in all areas meant that just over a year later, we were finalising our Series B fundraising, securing an additional $40M and welcoming exciting strategic partners who are leaders in the industry. Needless to say, it’s been a busy time!
In the Beginning
Having spent the earlier part of my career in the elite technology world, it was a revelation to me – upon making a successful move to the financial services space – to learn that the asset management space was using old, inflexible technology that was an inhibitor for the industry rather than an enabler. How could such an incredibly sophisticated industry with trillions of dollars under management still be so behind on technology innovation?
What I observed at the time was little or no focus on user experience, workflow processes were non-existent, and a lack of APIs meant systems couldn’t talk to each other. Lack of accuracy and huge inefficiencies of this sort made no sense then and certainly make no sense now in a world where transparency, automation and the ability to leverage data have become standard.
What was more baffling was that the industry had evolved extensively, but without a corresponding evolution in its technology. Today, the type of assets under management, as well as the scale and volume of trading, are all very different to what was common 30 years ago. This is a direct result of the significant innovation in capital markets, including changing expectations for transparency, analytics, asset diversity and speed.
And yet, the legacy stack hadn’t been built to manage it. In fact, the entire industry continues to be in a “technical debt” – suffering from multiple patches and short-term solutions made in the moment without allowing for scalability or future industry needs. This is not in the best interests of the industry itself and it certainly isn’t good for investors.
Finding a solution
The challenge was the scale of the work required. It was clear that there was a huge opportunity to reinvent how investment funds are administered. We needed to make the industry more transparent, more effective and more efficient. Ultimately, this would ensure that the end-users – the millions of investors whose money is being managed – received the full benefit of more transparent and efficient industry processes.
Our timing was right – today’s technology such as the Cloud and advances in artificial intelligence and machine learning were advanced enough that this wholesale transformation was and is possible. What was needed though was the right combination of technology capabilities and a deep understanding of the funds management industry. And so FundGuard was born.
Our vision was ambitious – to become the gateway to a single source of truth for all investment management operations. To do this, we created a cloud-native SaaS platform, taking a digital-first approach to everything we do. FundGuard has been designed with the capability for co-operation, the use of APIs, high levels of user experience and transparency from day one.
Building a team
How did we manage this? This is of course where the team comes in. Every start up founder says that building the right team is the key challenge. We all say it, because it’s true. In our case, we needed to gather a unique combination of experts across technology and financial services.
We searched for experts with deep domain expertise who understood asset management workflows and data flows and who understood that complete transformation was needed. We also looked for technology specialists who truly understood how to build enterprise cloud and data science solutions. What both groups have in common is extraordinary experience in their chosen areas and a combined vision to drive the change that FundGuard and our partners are leading.
Surprises
And what a success it has been. I was asked recently what surprised me during our journey so far. Rather counterintuitively, it’s that that it took longer than I expected… and that some things took significantly less time than I expected!
At the start, we were perhaps overly optimistic on how quickly we’d be able to bring a contingency NAV product to market. We initially looked at equities and vanilla bonds, which seemed relatively simple. But we very quickly we learned that we had to take the complexity of asset classes and processes into account from day one, particularly considering the highly regulated nature of the industry. Our future clients needed to know that we could manage this complexity and that we were reliable, trustworthy and stable before they would be willing to come onboard.
On the other hand, we’ve been pleasantly surprised by how quickly we’ve been able to grow our customer base and attract new partners and investors. The market has long known the current investment accounting technology is not fit for purpose and there’s genuine enthusiasm for what we’re doing.
Building a company from the ground up, with a vision to overhaul and replace an entire industry’s technology stack hasn’t been easy. You get a lot of people saying “No” along the way. But if you truly believe in what you’re doing (we do), and you know that the industry will start to catch on, then it gives you the impetus to keep going and leading the change. And now, in spite of the early NOs, our “Yesses” have been amazing: New clients, new partners, new employees and incredibly supportive investors.
FundGuard is transforming the future of investment accounting by delivering on promises that would be a non-starter for current legacy systems. Our success is informed by the fresh thinking, agility, and technological prowess of the innovators and industry veterans who make up our team.
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