For those of us who entertain the idea of getting into retail investing but don’t really trust ourselves with our own money, there are few options available. For example, you can read up on all the hot new trends in mobile advertising, but you can’t just cruise into Scottrade and say, “All my money in mobile advertising!” And what if you want to invest in a specific cause that you’re passionate about, like democracy in the Middle East? How exactly do you invest in democracy in the Middle East? For the retail investor who wants to invest in topics that they’re passionate about, there’s now Motif Investing, which announced Thursday the close of its $6 million Series A round led by Norwest Venture Partners and Foundation Capital.
The site has been operating in stealth mode since last fall and emerged today in invite-only beta mode. So what makes Motif different from other retail investing sites? It all comes down to how you want to invest. At a typical retail investment site, you do your research on a specific company and then put your money in it, but with Motif, you invest in ideas. For example, if you want to invest in rebuilding efforts in Japan following the tsunami, you would request information from Motif and receive a “basket” of 30-40 stocks all centered around that particular idea that you purchase in one transaction.
“More important than the vehicle of how we do what we do, it’s more about the idea aspect,” said CEO and co-founder Hardeep Walia. “Why can’t there be something more intuitive? Something easier? If I pick the right idea, I make money; if I pick wrong idea, then I lose money. Idea investing works, and it should be easy.”
Walia told me that the idea for Motif came when he met up with a friend of his, Tariq Hilaly, a hedge fund analyst who would later become his co-founder, and told him about his interest in investing in cloud computing. He struggled to find information and eventually realized that there is no way to invest in all aspects of cloud computing, so Hilaly did some research for him and helped him out, but both thought there should be an easier, more direct way for retail investors to get information and invest in ideas they’re passionate about.
“For the past few years I’ve been searching for innovative companies that can successfully create new opportunities in the retail investment market. The meltdown of 2008 left consumers weary of financial markets and it was clear that change was needed,” said Sergio Monsalve of Norwest Venture Partners, in a statement. “When I found Motif, I was excited about the team’s approach to bringing a new investment platform to consumers who are looking for simple and exciting investment alternatives that provide more customer control at low costs. It was a logical and exciting early investment for us.”
Monsalve and Charles Modow of Foundation Capital will be joining Motif’s board of directors.
The company plans to use the new funds to build out the platform, boost customer service, and strengthen marketing. The site launches to the public this fall.