Retail investment startup Motif Investing isn’t wasting any time getting its operations up and running. Just two weeks after announcing its $6 million Series A round of funding, the company announced Monday that it has secured $20 million in a Series B round led by Ignition Partners.
Operating in stealth mode since last fall, the company emerged in invite-only beta mode earlier this month and promises to be a revolutionary new take on the concept of retail investing. What makes Motif unique is its focus on “idea investing,” or putting your money into an industry or idea rather than a specific company.
For example, if you had invested in smartphones four years ago, you’d be rolling around in the massive pile of money you’d now have, and there’s nothing cozier than spending a Christmas morning making dollar-angels in your money vault. But it’s virtually impossible to invest in all aspects of smartphones. You could invest in Apple and Google (if you haven’t already), but those are only specific OS companies—they don’t cover the entire expanse of the smartphone industry.
“Had you invested early in an idea like the mobile Internet or cloud computing, you would have realized significant gains,” said Tariq Hilaly, co-founder and chief investment officer of Motif Investing. “The challenge for most people is that they have no way to map their idea to an actionable investment.”
Enter Motif, which allows you to invest in fairly broad topics (or motifs, hence the name), rather than specific companies. Until now, that’s been easier said than done. Co-founder and CEO Hardeep Walia said that the idea for Motif came to him when he met up with friend and hedge fund analyst, Tariq Hilaly, and told him about his interest in investing in cloud computing. Walia had done his research, but realized there was no way to invest in all aspects of cloud computing. Hilaly helped him out, but the two realized that there had to be an easier way to invest in ideas.
“Why can’t there be something more intuitive? Something easier?” Walia said to me we talked earlier this month. “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.”
While idea investing sounds lovely, you would be remiss if you weren't just a teensy bit skeptical. You may know that you want to invest in cloud computing or the mobile Internet, but what about the actual execution? Different companies take different approaches to the same idea, so how do you know your money is being invested wisely? Motif has you covered. Let's say you want to invest in the cloud. You take your idea to Motif, and in return, Motif does the research and provides you with a "basket" of about 30-40 stocks, all centered around cloud computing. You purchase the entire basket in one transaction, thereby diversifying and ensuring your bases are covered.
"We raised this Series B to allow us to continue to focus on building a terrific company. Our funds will be used to continue to develop our product, and to build out our customer service operations and marketing," said Walia. "Ignition shared our passion for bringing idea investing to individuals. John Connors is an astute investor and will add a lot of value to our already awesome Board."
Motif is expected to launch this fall and is currently accepting beta users.