A fintech entering the crowded wealth management space just nabbed nearly $9 million in funding from the VCs that backed Venmo, Monzo and Acorns

Matador

Jannick Malling, co-founder and CEO of Matador, is catering his app towards younger investors.

• Matador, a recently launched wealth management platform, announced nearly $9 million in early seed and Series A funding co-led by venture capital firms Accel and Greycroft.
• Matador co-founder and CEO Jannick Malling told Business Insider that the company will cater to younger, first-time investors by offering a community for them to interact with.

The financial markets can be a scary place for the inexperienced. It helps to have some support from your friends.

That's the belief of Jannick Malling, co-founder and CEO of the recently launched Matador app. The wealth management platform, which offers commission-free stock and ETF trading, is looking to cater to young, first-time investors by creating a social community they can interact with.

There are no lack of startups in the wealth management space, especially those catering to inexperienced investors. The space has proved especially difficult to turn a profit in thanks to newcomers' low fees and high cost of customer acquisition.

But Malling is confident there is still room for another player in the space, especially one that caters specifically to new investors who might have previously been hesistant to get involved in the markets.

"I think that market is still wide open. I think there are 20,000 people that are turning 18 everyday in this country," Malling said. "A lot of the current stuff out there isn't as inclusive."

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Malling isn't alone in his optimism that there's room for more startups in the wealth management space. On Wednesday, Matador announced it received nearly $9 million in early seed and a Series A round co-led by venture capitalists Accel and Greycroft. The investors have previously proved successful in the space, backing European neobank Monzo and robo advisor Acorns, respectively, both of which are nearing unicorn status.

Ian Sigalow, partner and co-founder at Greycroft, compared Matador to payments app Venmo, which he was an early investor in. Matador's feed, which shows the user's friends' interactions and investments, functions in a similar way as Venmo's.

"I don't think any of the existing vendors are doing it right," Sigalow said. "When you create a feed, you slow people down. They are consuming content in your application, in addition to using it as a utility. And when you do that, you create intent that enables people to see what their friends are doing. You create increased engagement, and you create just enough virality so that users refer other users."

What makes Matador different from other investing apps, Malling said, is its social features. Customers are encouraged to connect with friends, share their own investment decisions and comment on each other's choices. The community feel of the platform gives newcomers comfort when making investment choices, he added, allowing them learn and interact with each other as they go.

Malling said young people are accustomed to having online communities in every aspect of their life, so it only seems natural the same should be true for investing.

"You think about a 25-year-old today. ... You didn't adopt social networks. You grew up on social networks. There is a lot of familiarity there. Make people all the more comfortable kicking off their financial journey with us versus somebody else," Malling said. "You don't take a trip without going to TripAdvisor, checking out hotels or Airbnb and seeing ratings of experiences. So we really want to bring that same dynamic into the world of investing."

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Matador is still in its early days, as the app has only been live on a limited release for a few months. Malling declined to disclose customer numbers or total assets under management.

In addition to a wider release of its services, Matador also announced the launch of a cash management service on Wednesday that offers a 2.5% interest rate for accounts with less than $10,000. Several fintech wealth managers have released similar offerings, including Betterment, Acorns, Sofi, and Robinhood, as they aim to take more market share from traditional banks.

"The ability to understand what your friends are buying and why they are buying it, one, it lowers the barrier for new users to come into the platform, because they get to see," Sigalow said. "It's scary to buy your first stock. In some instances you don't what your doing. So there is some social proof aspect."