- Berlin-based Moonfare is kicking off its US expansion plans from a New York City office.
- The company provides access to private equity funds for high net worth individual investors.
- Moonfare hopes to tap into the more than 1.1 million very-high net worth individuals in the US.
Moonfare, a fintech that allows high net worth individuals to invest in private equity, is set to launch in the US.
The German startup, which was founded in 2016, wants to widen access to alternatives to public market investing, which has typically been more difficult for individual investors to put money into. The firm operates across 13 countries and is now ready to expand into the US, a growing market for very-high net worth (VHNW) individuals.
High net worth individuals are broadly categorized as a person with more than $1 million in liquid financial assets, which excludes the value of their home. The US has around 1.1 million VHNW individuals – defined as someone with around $5 million or more – including the most millennial millionaires in the world. Those in the upper ultra-high category have north of $30 million in investable assets. Moonfare will largely target those in the VHNW category and above.
The US expansion was a “logical” next step given the size of the market but also the fact that most of the standout funds that Moonfare partners with, such as KKR, Blackstone, and IVP are based there, Dimitrios Magiakos, the startup’s US chief told Insider.
Moonfare has set up an office in New York City and has been working closely with VC firm Insight Partners, which led its recent $125 million Series C, on how to establish its operations stateside.
“Our mission from the start has been to open up private markets to sophisticated investors,” Magiakos told Insider.
“Traditionally individual investors don’t have access to alternate investments and don’t want to spend weeks reading documents about each individual fund. We do a lot of heavy lifting on their behalf through the platform and provide the education needed to help investors get more familiar with the asset class.”
Moonfare lets users directly invest in funds with lower entry minimums of $125,000 with registration and know-your-customer (KYC) onboarding included through its platform.
In many ways, the company is looking to solve pain points on both sides. Major private equity firms may well want access to more investors and wealthy individuals want to diversify their holdings, particularly given private equity has mostly outperformed the S&P 500 in recent decades.
In much the the same way that the barriers to retail trading have been reduced through fintechs like Robinhood and others, Moonfare wants to bring new investors into a notoriously opaque world.
To do so, the company has taken time to assess its entry into the market, Magiakos adds.
“It’s a continuous learning process for us, every time you launch something it’s a new thing but previously it was all under a similar European umbrella,” he said. “We have a lot of things to get right, from setting up new licenses and US regulations, to the type of things that excite the US compared with Europe, even down to the language. So our go-to market approach is different because people even bank differently.”
The company did have internal discussions about how other European startups approached US expansion, including the recent decision by German fintech bank N26 to pull out of its previously much vaulted US operations, Magiakos said.
On the ground, the company has been competing with a heated talent market in its bid to grow its team and wants to have around 30 staff in New York by the end of the year.
Alongside the US, Moonfare will also launch operations in Singapore later this year in a bid to start cornering the Asian market.
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