Prosper, a Wealthtech providing services in partnership with RiskSave Technologies Limited, which is authorized and regulated by the Financial Conduct Authority, has raised £3.2 million in “Angel” funding, according to a company statement.
Prosper, not to be confused with the US-based platform, was founded by Tandem Bank founders Nick Perrett and Ricky Knox, along with Phil Bungey of Nutmeg. Prosper says its goal is to “revolutionize” how people save and invest.
Investors in Prosper include Tom Blomfield, founder of Monzo, and Matt Cooper, co-founder of Capital One Bank.
The company wants to provide digital services similar to what has been accomplished in the banking sector. It says it will launch the “highest interest rates on cash, offering zero-cost index funds,” providing access to alternative private market investments that may offer higher potential returns.
The UK banking sector has been slow to pass on higher rates to savers, thus creating an opportunity for Fintech innovators.
Perrett says they know how much interest consumers fail to generate on their cash, and they want to change the paradigm by promising the highest rates available. At the same time, they believe the “days of mutual fund supermarket” are over – another sector that is hobbled by hidden fees.
Knox adds that it is not just about the best returns but the best net of charges.
“The investment universe has moved on,” says Knox. “There are less than half the number of public companies that there were 30 years ago, and over 85% of all US companies with more than $100 million in revenue are not listed on the stock market. And yet the investment products we put money into haven’t changed!”
While the very wealthy gain access to better-returning investments, the founders see an opportunity to provide similar returns for the masses.
Prosper says there are about a billion HNW and mass affluent around the world that are “getting a raw deal” on their money. This is the market Prosper is targeting.