Naro, an ETF fintech startup, has announced the successful closure of its $3 million Pre-Seed funding round. This funding round aims to facilitate Naro’s mission of transforming the company ETF and fund market by providing innovative solutions that alleviate operational and regulatory burdens for companies.
Naro offers a platform that empowers companies to create their own investment products, including ETFs, index funds, and money market funds, without the complexities associated with traditional fund management. The platform redistributes fund earnings among involved parties and enables distributing companies to claim a larger share of the ETF and fund market.
Key use cases for Naro’s platform include leveraging own investment products for internal deposit and treasury management, diversifying investment offerings through proprietary ETFs, and enhancing income share with existing fund concepts.
According to founders Chris Püllen and Nils Krauthausen, the rapid growth of ETFs in Europe, which surpassed $1.5 trillion by the end of 2022, underscores the necessity for a more company-centric approach in the investment product landscape. Traditional ETF and fund solutions often neglect the interests of distributing companies, leading to suboptimal investment products characterized by lower interest rates, higher fees, and limited revenue sharing. Naro aims to address these shortcomings by introducing a fairer and more tailored approach to fund infrastructure.
Leading the Pre-Seed funding round are European investors La Famiglia (now part of General Catalyst) and Discovery Ventures, with participation from founders of European unicorns Flix and Forto, as well as other notable VCs and fintech industry veterans.
Chris Püllen, co-founder of Naro, emphasized the importance of providing fair and long-term wealth-building solutions for both individual users and companies. He highlighted the need for investment products that align with specific use cases and cater to the unique requirements of companies, rather than adopting standardized approaches.
Judith Dada, Partner at La Famiglia (now part of General Catalyst), expressed confidence in Naro’s vision for modernizing and democratizing the fund infrastructure. She noted that while various sectors of the fintech market have undergone significant digital transformation, the fund infrastructure segment remains largely untouched, presenting a ripe opportunity for disruption.
The newly secured capital will empower Naro to enhance its fund infrastructure through strategic partnerships, regulatory compliance, and technological advancements. The ultimate objective is to establish a comprehensive European fund ecosystem that enables companies to seamlessly create customized, technology-driven funds tailored to their specific needs, without the burden of operational or regulatory complexities.
