INSUBCONTINENT EXCLUSIVE:
The founders of Vise AI met when they were 13, a couple of teenagers more interested in applied artificial intelligence than English class
Fast-forward several years and the pair has relocated from the Midwest to San Francisco to raise money for a financial technology business
they’ve been self-funding since 2016.As teenagers with an inordinate amount of AI knowledge, Samir Vasavada and Runik Mehrotra proved to
be quite useful to large businesses, investment bankers and other financiers
Leveraging their AI know-how, they were paid $700 per hour by a consulting firm to teach financial “experts” about AI
Mehrotra, according to Vasavada, is a mathematical prodigy: “And that translates extremely well to AI, right, because what underlies AI is
math,” Vasavada, co-founder and chief executive officer of Vise AI, tells TechCrunch
“We had the ability of articulating what AI is to investment bankers in a way that they would understand
Whereas most expert explanations would be really complex and very technical.”Meanwhile, school was on autopilot
“I was taking phone calls in English class,” Vasavada said
“It wasn’t very good but we were making a lot of money.” Ultimately, that money funneled into the early makings of a real business,
Vise AI, which automates portfolio management using AI and machine learning
Launching onstage at TechCrunch Disrupt San Francisco today, the SEC-registered investment advisor will begin customer on-boarding next week
In short, the platform analyzes clients’ investment needs and builds them a personalized portfolio of stocks, bonds and other assets, then
provides investment manager tools to automate management.“It’s an unsexy industry that makes all of the money in finance,” said
Mehrotra, co-founder and chief technology officer of Vise AI.For now, the team is going after independent advisory shops, those without a
flock of analysts available at their beck and call and who need outsourced investment management
Ultimately, they plan to pursue the big wealth managers
The business has also been approved as a subadvisor by TD Ameritrade Institutional, which has thousands of independent RIAs on its
platform.“The icing on the cake is what we refer to as portfolio intelligence,” Vasavada explains
“We can provide unique insights, justifications and logic as to why specific investment decisions were made — talking points to make the
advisor look smarter with the clients because it’s a relationship game with these advisors, so tools that will help build their
relationships and help empower their relationships, while still delivering a better portfolio to the client is the type of solution that
really needs to be built in this space.”“We are literally giving them bite-sized portfolio intelligence,” adds Mehrotra
“Because most of them aren’t really doing the investment management themselves, right? So they’re either using some ETF allocation
tool, like Betterment for Advisors, or something like that, where it’s just a standard set of ETFs and there really isn’t any
personalization.”
We felt like we were turning away tons of money. Vise AI co-founder Samir VasavadaVasavada, hailing from
Cleveland, and Mehrotra, raised just outside Detroit, met years ago at a Northwestern University summer research program
The two have since established themselves as AI experts, supporting high-profile clients (who they can’t name due to non-disclosure
agreements) as consultants and completing the fintech conference circuit a few times over
But when it came to raising venture capital to exit the era of self-funding and launch their AI-enabled portfolio manager, they were
clueless.Their first infusion of outside capital came in the form of a $20,000 uncapped note from Dorm Room Fund
A little something to help them through the daunting fundraising process
But their first real pitch meeting was with none other than Vinod Khosla, the billionaire founder of Sun Microsystems and Khosla Ventures
Khosla’s son, Neal Khosla, had worked on the investment team at Dorm Room Fund and made the introduction.Khosla passed and the Vise team
realized they had no idea what they were doing
They began refining their pitch
After reaching out to roughly 1,000 different investors (Vasavada created a detailed CRM to track all their cold pitches) they raised $2
million from co-leads Keith Rabois, a co-founder at PayPal and a partner at Founders Fund, and Ben Ling of Bling Capital, two investors who
were, ironically, former general partners at Khosla Ventures
Great Oaks Ventures, Flatiron Health co-founders Nat Turner and Zach Weinberg, Future Advisor founder John Xu, NFX’s Pete Flint and
Contrary Capital also participated
Vasavada and Mehrotra said that once they had tapped two high-profile leads, offers came flooding in, including from VCs who had rejected
them just weeks before.“This was our first round of fundraising ever,” says Mehrotra
“So in the beginning, a lot of it was just like, figuring out how things worked and learning how to best pitch the company because it is a
I think once we got the momentum … We felt like we were turning away tons of money.”
We want to empower advisors to be better at
their jobs. Vise AI co-founder Runik MehrotraOnce they reach $50 million in assets under management, Vise plans to raise a much larger
round of funding to help the team expand and open an office in New York.Vise is targeting a market worth trillions in one of the most
valuable industries in the world
To succeed in the long term, the startup will have to infiltrate a decades-old network relying on legacy technology, as well as battle
Silicon Valley’s narrative that robo-advisors will soon make the financial advisory space obsolete
According to their thesis, companies like Betterment and Wealthfront are successful with tech-rich millennials, but once one accumulates
“real wealth,” it’s a conversation with a human being they’re looking for, not an easy-to-use app.“We want to empower advisors to
be better at their jobs, so they can focus on actually building better relationships and holding their clients’ hand,” said Mehrotra.
