Pinnacle-backed wealth platform OpenInvest finds a white knight
Under-pressure wealth platform OpenInvest lives to see another day.
Andrew Varlamos founded the Pinnacle-backed wealth administration platform OpenInvest in 2017.
Street Talk understands the Pinnacle-backed company, founded by Powerwrap co-founder Andrew Varlamos, has received a vital capital injection from existing investor Tayside Group – the family office behind one of Australia’s largest food services businesses, PFD.
The fintech had been put up for sale via boutique corporate adviser Acova Capital earlier this year, pitched as a way for financial institutions to pick up an early-stage, high-quality technology platform.
Sources said four bids were registered, including from online share trading and superannuation platform Superhero and two alternative asset managers. However, OpenInvest’s shareholders were underwhelmed by the offers and concerned about being wiped out, electing to push through additional funds to get the company to the scale required to close large institutional transactions and reach profitability.
The amount raised was undisclosed but Street Talk understands it was south of $10 million. Sources said Varlamos had retained his position as chief executive but the process will have the board, chaired by former NAB head of institutional banking, Spiro Pappas, turn over.
OpenInvest has about $70 million under management but makes less than $1 million in annual revenue. It reported a $6000 net loss in financial year 2022, its latest public accounts show.
Superhero declined to comment when contacted by Street Talk.
OpenInvest was founded in 2017 by Varlamos, a wealth management veteran whose career includes senior roles at KPMG and wealth platform Praemium. It aims to democratise access to professionally managed model portfolios by enabling clients like stockbrokers and financial advisers to white-label its platform and distribute actively managed funds offered by traditional asset managers such as BlackRock, JPMorgan, and Schroders to everyday investors.
The platform is backed by Ian Macoun’s boutique funds management shop Pinnacle, which tipped in $3 million in seed funding in 2021.
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