FREDERICTON–A FREDERICTON FINANCIAL TECHNOLOGY FIRM HAS JOINED A PRESTIGIOUS STARTUP ACCELERATOR AFTER RAISING $800,000 IN FUNDING.
Passiv has grown its assets to nearly $2-billion as it enters the 11-week winter cohort of Y Combinator, one of the largest startup accelerators in the world.
“It’s a game-changer for us and it’s changed how we envision ourselves as a company. What we thought we could do was lower until we got in and realized the sky is the limit,” said Brendan Wood, co-owner and founder of Passiv.
“We have some of the most world-renowned investors backing this and it makes you think bigger. There’s a vast network of investors that look to Y Combinator as a symbol that if they’re on board it could be a big deal.”
With this milestone, Passiv joins St. John’s, N.L.-based Sequence Bio and CoLab Software as the only Atlantic Canadian companies to join Y Combinator.
Founded in 2017, Passiv is a cost-saving portfolio management app for self-directed investors. It specializes in passive investing and calculating trades to stay within an ideal range of investment allocations.
“You can think of it as a DIY-robo-advisor,” noted Wood. “We started the company as a portfolio management app to help Canadians save for retirement.”
Users tell Passiv what kinds of assets they want to invest in, and it makes recommendations, using specialized automated portfolio management software. This allows users to buy stocks, trade funds and cryptocurrencies and build personalized funds.
New Direction
Passiv owners and founders Wood and Brendan Lee Young are considering integrating other types of assets into Passiv’s repertoire, with plans to leverage the new connections they make through Y Combinator to raise more capital.
“The thing we’re focused on is proving there is market demand for the solution we’re trying to offer,” said Wood. “Once we can prove that, that’s the thing that really unlocks future growth potential.”
Wood said that equipping Passive with integration for many different brokerages around the world allowed them to expand to a global scale.
“That was largely successful. We have users in 40 different countries but we realized we’re not the only company that has needs for those types of integrations,” he said.
“There are a lot of investing apps similar to Passiv, and some are quite different, but the key thing that would make them all better is brokerage integration – being able to connect to brokerage accounts and help people manage their money where it is, rather than having to move it to a new service. So that’s the new direction the company is taking.”
“We’re going up against some fairly large incumbents in the space that are well-capitalized. So we’ll need something like that in order to be able to meet our goals,” said Wood.
Passiv, which employs 10, partnered with Toronto-based Questrade brokerage and reached the point of managing $1-billion in assets March 2021.
Wood said more hiring is on the horizon but the focus at the moment is on growing with Y Combinator first.
“Y Combinator helps with just about everything; it’s an amazing level of support. Not only are the seed-stage investors, they run an education program on how to do product development and make something people want.”
The app is free, with a paid account option that makes trades automatically based on user preference.
When expanding, Passiv faced fewer regulatory snags than other fintech apps, since it doesn’t give financial advice or hold assets – both of which are regulatory triggers.
Hometown Advantage
While many companies that grow to the scale of Y Combinator investment change their incorporation from their country of origin to the U.S., Wood said Passiv will buck this trend and stay in New Brunswick.
“We figured we’d have a better shot at reaching our goals by staying a Canadian company,” said Wood.
“The entire tech community is tight-knit and it’s easy to get to know everyone. It’s amazing what people are working on here and very motivating.”
See Sam Macdonald’s full commentary on Huddle.Today HERE