Naro raises $3M to transform company ETF and fund market

Today, EFT fintech Naro announced the closure of their $3 million Pre-Seed round. Naro helps companies create their own investment products such as ETFs and index and money market funds without any operational or regulatory burden. 

It redistributes fund earnings among the parties involved and gives the distributing companies a larger share of the ETF and fund market. 

Specific use cases include:

• Using own investment products for internal deposit and treasury management.
• Diversifying the investment offering via own ETFs.
• Increasing the income share at existing fund concepts.

Founders Chris Püllen and Nils Krauthausen assert that the exponential growth of ETFs in Europe, reaching $1.5 trillion by the end of 2022, belies the urgent need for a more company-oriented approach. 

Traditional ETF and fund solutions do not sufficiently account for the interests of the distributing companies, resulting in lower interest rates, higher fees, and inferior investment products. This forces them into a purely transaction-based monetisation model or leaves them with only a fraction of the management fees—Naro is now changing this.

European investors La Famiglia (now part of General Catalyst) and Discovery Ventures led the round, with participation from founders of European unicorns Flix and Forto, other VCs Angel Invest and Robin Capital, as well as operators with leadership experience at fintech companies like Liqid, N26, Plaid, and Trade Republic.

Chris Püllen co-founder of Naro, commented:

 "Access to fair and long-term wealth-building solutions for individual users and companies alike should be a norm.

For this to happen, investment products must be shaped after the use case and the companies that need these products — and not after existing one-fits-all approaches.”

Judith Dada, Partner at La Famiglia (now part of General Catalyst), shared: 

"The founders of Naro impressed us right from the start with their vision for a modern and fairer fund infrastructure. 

While many areas of the fintech market have undergone significant transformation in recent years, fund infrastructure has remained largely untouched by digitalisation. 

This market, which is worth 150 billion euros in the EU alone, is now ripe for disruption."

This fresh capital will enable Naro to strengthen its fund infrastructure by forging strategic partnerships, obtaining regulatory licenses, and refining technological frameworks. 

The ultimate goal is to establish an overarching European fund ecosystem that allows companies to create tailor-made, technology-driven funds to suit their external and internal needs best without carrying any operational or regulatory overhead.

Lead image: Naro. Photo: uncredited.