Pave Finance, a wealth management software company, has raised $14million in an oversubscribed seed financing round. The company stated the capital would be used to accelerate product development and support the commercial rollout of its AI-powered portfolio management platform designed for investment advisors.
The funding round exceeded its initial target of $10million and included investments from former executive officers and board members of US financial services firms. Paveās platform aims to address operational inefficiencies for wealth advisors, citing industry data suggesting advisors spend an average of 18 hours per week managing portfolios manually. By automating portfolio construction and management, the software seeks to help advisors scale their services while maintaining client customisation.
The Pave platform integrates an alpha scoring algorithm, an optimisation engine, and a trading platform. It tracks over 10,000 publicly traded securities globally, allowing advisors to build customised portfolios that account for client risk tolerance, existing holdings, and tax considerations.
The system uses machine learning and predictive analytics to generate buy and sell recommendations and can execute trades directly through integrations with major custodians, including Charles Schwab, Fidelity, and Interactive Brokers.
Platform development and adoption
According to Pave, its software platform was developed from quantitative models previously used by the firmās investment team to manage billions in assets. The company reports that over the last 15 years, the standard model behind its software has outperformed the S&P 500 by an average of 285 basis points per year. Pave includes a disclosure noting that past performance is not indicative of future results.
Since launching the software, Pave has begun deploying it to independent investment advisors who collectively manage more than 60,000 client accounts and over $18billion in assets.
Christopher Ainsworth, CEO and co-founder of Pave, said: āThe market acceptance, acceleration of advisor adoption, and assets flowing into Pave underscores the strength of our platform. These milestones highlight the meaningful impact we are making for advisors and their clients. Pave is transforming how portfolios are built, personalized and managed. This new injection of capital enables us to accelerate innovation, expand our capabilities, and further support advisors in delivering truly personalized investment outcomes at scale.ā
Leadership and company structure
Paveās leadership team includes executives with experience from various financial institutions and hedge funds, including US Trust, Deutsche Bank Private Wealth, SAC Capital, Merrill LynchĀ and Morgan Stanley.
Ainsworth previously served as head of west coast for Deutsche Bank Americas. Peter Corey, co-founder and chief risk officer, formerly worked as a macro trader at SAC Capital and ran derivative desks at Lehman Brothers and HSBC. Steve Evans, chief investment officer, developed the investment system at U.S. Trust, where he oversaw $7billion of client assets.
Pave Finance operates through three business units: Pave Labs for software, Pave Securities for broker-dealer services, and Pave Investment Advisors, an SEC-registered investment advisor. The company derives revenue from software licensing fees, broker-dealer revenues from trading and spreads, and investment advisory fees.
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