Peak XV invests $35 million in wealth and asset management startup Neo

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Peak XV Partners has invested $35 million in Neo, a fintech startup founded by industry veterans that is increasingly challenging incumbents including IIFL, Edelweiss, and Waterfield Advisors, as the largest India-focused VC broadens its bets on wealth and asset management.

Neo operates a suite of wealth and asset management services, serving businesses, sovereign and pension funds large family offices, and individuals with ultra-high net worth. The firm, which began operations in 2021, has already amassed over 1,000 customers, said Neo founder Nitin Jain in an interview.

The two firms reserve the optionality to extend the size of the investment, they said. TechCrunch reported in August that Peak XV was engaging with Neo for an investment. Neo earlier raised about $40 million from a list of undisclosed investors.

Despite being second only to China in high-net-worth individuals among BRICS countries, and being home to more than 14,000 ultra-high-net-worth households, India’s wealth management sector remains underdeveloped, plagued by a trust deficit and misaligned incentives.

Part of the reason is that the industry is often more geared toward product sales than tailored financial advice, said Jain, who like many of his co-founders and other founding members of Neo started the venture after long stints at investment giant Edelweiss.

On the advisory side, Neo serves as an extended CIO to multi-family offices, participating in their investment committees and offering views on asset allocation, corporate holding structure, and taxation.

“We sit on their side. It’s slightly different from the classical wealth management practice as we are advising as well as selling products to them. So this is a very unique proposition,” he said.

The startup works with multiple relationship managers, providing them with additional resources and incentives that supplement their existing practices. Jain said he estimates that 350 to 400 RMs in India control 70 to 75% of assets. Neo will aim to attract about 100 of them in the next two to three years, he said.

On the asset management side, Neo focuses on long-term yield-based solutions in real estate and private credit for clients who are looking to generate an income from their investments.

Neo already has about $3 billion of assets under management, it said. The startup didn’t need new capital and doesn’t anticipate raising more than one more round in the future, said Jain.

Sakshi Chopra, an MD at Peak XV Partners, said the firm had been tracking Jain’s journey for over a year, and in Neo, it found the right combination of experience, expertise, and opportunity.

“The founding team, they built asset businesses at Nuvama and Edelweiss, is very high-quality and this is all they have done through their lives,” she said in an interview, adding that the two firms began engaging about 15 months ago. “We share the philosophy of doing good for the people who trust us with their money.”

Having Peak XV becoming a partner will help Neo recruit high-quality talent, said Jain, citing the venture firm’s strong reputation and brand image.

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Edmund Shing, PhD

Global Chief Investment Officer
BNP Paribas Wealth Management

Edmund has over 29 years of experience in financial markets in a wide variety of positions, ranging from proprietary trading to portfolio manager in a number of financial institutions in London and Paris.  He previously held the role of Global Head of Equity and Derivative Strategy at BNP Paribas in London from 2015 to 2020, and has been Chief Investment Officer at BNP Paribas Wealth Management since November 2020.

Edmund is responsible for piloting our investment strategy and will continues to rollout out recommendations and themes with actionable advice that brings our expertise to our clients and support to our client-facing teams.  In this time of change, his expertise in following and anticipating markets is a true value added for both our customers and those at Wealth Management who serve them.

Edmund has a PhD in Cognitive and Computing Science from the University of Birmingham in the United Kingdom, and has done advanced studies in Knowledge-Based Systems and in Experimental Psychology.  He is an EFFAS-certified financial analyst. He has also authored the book “The Idle Investor” published by Harriman House in 2015, proposing 3 simple investment strategies that take only a few minutes to execute per month.

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