Unlock Your Access for the Data Webinar: Winning Data Teams: Getting Started and Scaling Your Team aired November 15, 2022

“All life is an experiment. The more experiments to you make, the better.”

— Ralph Waldo Emerson

The startup game is not for the faint of heart.  While there are thousands of new companies being launched by bright-eyed entrepreneurs every year, only a small percentage will turn out to be successful.

This is especially true in the financial technology (fintech) space where competition for funding and customer attention is fierce.

Incubators and accelerators can be golden tickets for startups.  They provide mentors, networking opportunities, technical resources and funding, in exchange for small stakes in the company.

Envestnet | Yodlee launched their own incubator in October 2014.  The goals were not only to nurture startup companies, but to also highlight innovative use cases of Envestnet | Yodlee technology and data.

According to Jeff Cain, Incubator Director, the incubator is also part of Envestnet | Yodlee’s platform strategy.  By encouraging startups to leverage Envestnet | Yodlee’s resources they bring added value and innovative ideas to their customers.

Cain has already ushered two incubator classes through the program, with the third in progress. Below are highlights from a few of these startups that gave their best investor pitch at this year’s Envestnet Advisor Summit.

DraftFintech Startups

Draft is a big data book of business app that analyzes client portfolios and identifies marketing opportunities for advisors.  They leverage Envestnet | Yodlee’s held away asset data and create holistic snapshots of clients’ investments.  The snapshots are similar to Morningstar X-rays.

They also offer innovative analytics across an advisor’s entire book of business such as:

Draft’s advanced query and data visualization tools use data that comes in from Envestnet | Yodlee but is unused by other analysis, such as transaction data.

This startup also offers a number of other features including leveraging crowd-sourced data to compare different clients with similar risk profiles.

The Draft tools can be integrated into an advisor’s website to act as a passive lead generator that offers free portfolio checkups for prospective clients.

My Two Cents: I like the analytics displayed in Draft, but I would like to see additionally functionality that could be more of a game changer for advisors. There needs to be a convincing reason to pay for Draft on top of the other analytics tools that advisors already have.  Is there a use case where the advisor can leverage the holistic snapshot report to gain additional wallet share from clients or sign new ones?  The barrier to entry seems low for portfolio management applications to deliver some of the same analytics.  

Genivityfintech startups

“Health is the New Wealth.”  This is the mantra of Heather Holmes, founder and CEO of Genevity, a startup that sees gold in mining clients’ health data.

Holmes believes that data about client’s health should be taken into consideration in their financial plans.

Genivity offers three ways to help advisors:

Genivity has built a suite of gamified tools that perform health assessments, identify life risks, financial spending, hereditary risks, and behavioral factors. Clients must enjoy entering their information this way since they have over 25,000 profiles created so far.

The network effect is strong, evidenced by each participant referring and average of 13-17 other family members to try out the application.  This sounds like it could be a tremendous referral source for advisors.

Some of the benefits of the Genivity app:fintech startups

The Genivity advisor dashboard acts as prioritization tool to highlight which clients the advisor should focus on first to develop deeper family relationships.

There are two product versions being offered:

AARP recently gave Genivity their innovator of the year award.

My Two Cents: I love what Genivity is doing in this space and I don’t know of anyone else who is taking this angle on the market.  Convincing clients and prospects to divulge their health data, for free, and then integrating it into the financial planning process and using it as a new prospecting source is a stroke of genius.  

I recently interviewed Michael Kitces for my YouTube channel about a wave of acquisitions of advisor lead generation tools and the failure of others.  One prescient thing that he said was, “whomever figures out digital advice lead generation at scale is going to have a fantastic business.”  

Based on the results from their beta testing, it looks like Genivity might have this nailed down.  If I were a VC, I’d have had my checkbook out as soon as Holmes stepped off the stage.

InvestReadyfintech startups

Everyone has probably heard of Kickstarter, one of the first online crowdfunding sites, and probably the best known.  You can fund almost anything on Kickstarter from the Pebble Watch to The World’s Best Travel Jacket to the Veronica Mars Movie Project.

While entrepreneurs all over the world can accept your financial support via crowdfunding sites, what they were prohibited from doing was providing you with equity in return.  The best you could expect was an early version of whatever product they were developing.

That all changed in 2012, when the JOBS Act was passed by Congress.  This bill allowed accredited investors to access online investments.  But how do you verify that an investor is accredited?

This is the point where InvestReady comes in.  Their solution automates and digitizes the process of determining investor accreditation and eliminates the manual effort and paperwork involved.

Under current law, the liability falls onto issuer to ensure that all potential investors are qualified. This means verifying that they have net worth over $1 million, which usually requires a combination of tax returns, bank statements, credit reports or other documentation.  This is where Envestnet | Yodlee data and network comes in.fintech startups

The InvestReady platform provides complete privacy to investors and offers a guided, digital experience for everyone involved.  Investors are walked through a simple questionnaire that request verification from an attorney, CPA or other trusted source via email.  Once all the documents are digitized, uploaded and verified, the system generates a digital certificate as proff that the process was successful.

Their target client segments are the hundreds of crowdfunding platforms that may want to pivot into offering equity to investors.  This is a big ‘if’, but even if only a small percentage of sites sign up, the revenue could be large.

InvestReady is also targeting the $2 trillion private equity industry as well as secondary markets.

Their pricing is currently $20 per certificate. They plan on charging the company needing funding to pay the freight since this will reduce friction for investors.

My Two Cents: I’m intrigued by this and I think the potential market is very large given how crowdfunding has taken off and moved beyond the Internet-savvy crowd. But it seems that a lot depends on whether the government starts enforcing their rules.  What if a crowdfunding site decides to just build a brief questionnaire to allow investors to self-qualify? Who will check the records and verify the process was followed?  Will firms that cut corners be fined?  If regulators demonstrate that they are ready to enforce the investor qualification rules, then InvestReady could become a license to print money.

StreamLoanfintech startups

Anyone who has every applied for a mortgage knows what a pain in the ass it can be.  The endless amount of paperwork of loan applications, credit checks, income verification can quickly become a nightmare.  Communication is fragmented due to the number of parties involved. The borrower, their lawyer, bank, real estate agent are all at risk of being cut out of the loop and delaying the process.

StreamLoan is a B2B SaaS platform to help mortgage lenders to digitize and simplify the home purchase process. Their tagline is, “Buy a Home on Your Phone.”

Their target customers are banks and mortgage lenders who could be charged for each loan processed through the app.fintech startups

StreamLoan believes they can collapses the time required to process a loan by up to 70%.  From around 50 days down to just 15 days.

The automating application process would be:

Other features of the app include:

They have signed one client so far, Alterra Home Loans. They have loan coverage in 26 states with $2.0 billion in originations.

StreamLoan’s CEO, Stephen Bufler, has a track record, having launched two prior startups and successful exited with 20x return to investors.

My Two Cents: There are 7,100 lenders in the US who originate 95% of the $1.25 trillion of mortgages each year.  That is a huge potential market.  I plan to get a demo of the product since a lot depends on the U/X and their execution.  Is their app designed to delight users and provide a superior experience?  Can they build the required infrastructure to support the tremendous amount of data that they will be receiving if they sign a big customer?  Is their infrastructure secure to avoid embarrassments from hackers stealing customer data?  If the answers to these questions are affirmative, then I would want to get in on the ground floor with StreamLoan.


Totum is a human-centric risk profiling tool that wants to do a better job of quantifying the risk capacity of clients than the current crop of risk tools.  The CEO and founder, Min Zhang, was driven to build Totum when she realized that most clients do not understand their risk tolerance or the level of risk that is appropriate for them. (See How Risk Tolerance Software Is Disrupting Wealth Management)fintech startups

The deficiencies in most Risk Tolerance Questionnaires (RTQs) is that they fail to capture clients’ psychological preferences.  Current RTQ software ignores the risk capacity, which is critical to a comprehensive understanding of customer’s risk profile, Zhang insisted.  (See 3 Ways Personality Testing Crushes Risk Tolerance Questionnaires)

Some of the benefits for advisors who use Totum are that it captures many risks that are missed by standard RTQ’s:

There is a disconnect between the financial and human aspects of investing, Zhang explained. To close this gap, Totum calculates a proprietary metric called risk capacity.  Risk capacity quantifies the amount of losses that the client can accept. It combines work, hfintech startupsealth, financial, and geographic data and is more valuable that a standard risk score.

Since risk capacity is based on all of the factors is a client’s life, it changes when their life does, independent of their investments.

Totum can also be embedded into the advisor’s website as a passive lead generation tool. Prospective clients can go through the Totum questionnaire and see their own risk capacity score.

While Totum currently pulls data via the Envestnet | Yodlee API, they will soon to be integrated into the Envestnet | Tamarac platform, which will provide access Totem risk scores through the advisor’s dashboard.

Even though Totum was just launched  in 2015, they already have over 500 advisors using the tools as well as larger institutions looking to leverage their defensive methodology for their clients.

My Two Cents: I have written a lot about risk profiling tools. Over the past few years, there has been tremendous changes in this formerly stodgy part of the investment process.  Totum’s risk capacity score provides a better estimate of a client’s appetite for risk, which is missing from other tools.  

This is another regulatory play, since it requires pressure from government to push advisors towards better understanding of client risk. Otherwise, they will just stick with their current tools, as inadequate as they might be, since there is no downside for them.  I would suggest that Totum emphasize the Risk Capacity score in their UI by highlighting it in the Conversation Screen and focusing the workflow around it. They could also add an education component to explain the benefits of the Risk Capacity score to advisors and their clients.  

Is there a way to integrate Envestnet | Yodlee’s non-investment data into the risk calculation? Can a Big Data algorithm be developed that can calculate a client’s risk capacity based on their prior financial history?  I think this could be the future.

Envestnet | Yodlee Nurtures Data-Driven Fintech Startups

The Envestnet | Yodlee program is actually a cross between an accelerator and an incubator. Most accelerators give seed investments, while this one does not.  They offer no cash but also take no equity from the startups.  Most incubators require the startups to relocate to their premises so they can mingle with other startups and exchange ideas and feed off each other.  Envestnet | Yodlee does not require startups to relocate, which can be an advantage for some firms.

This hybrid model appears to be working since their program was recently recognized as the 2nd best startup incubator in the world.  It is a six month program that involves a series of boot camps and investor pitches.  They also offer mentors for each startup as well as free access to Envestnet | Yodlee’s API’s.

Their next cohort opens in two weeks. If you have a great idea for a data-driven fintech product, now is the time to get started!


One Response