Financial news

Berlin-based Naro, a fintech company, announced on Thursday that it has secured $3M (approximately €2.7M) in a pre-seed round of funding co-led by La Famiglia (now part of General Catalyst) and Discovery Ventures.

Other investors, including the founders of European unicorns Flix and Forto, other VCs Angel Invest and Robin Capital, and operators with leadership experience at fintech companies like Liqid, N26, Plaid, and Trade Republic, participated in the funding round. 

The German company will use the funds to build a state-of-the-art tech infrastructure, obtain regulatory approvals, and the development of strategic partnerships.

Naro: Building fair & digital fund infrastructure

Chris Püllen and Nils Krauthausen founded Naro in response to the glaring imbalance in today’s capital and financial system. 

Explaining the company’s mission to Silicon Canals, Chris says, “We enable companies to build their investment products, which gives them a higher share of the earnings of the ETF and fund market. This way, they can redistribute their earnings to private investors, resulting in lower fees and higher interest for the end user of the products.”

Tailored to individual company’s needs

With Naro’s help, companies can create their investment products, such as ETFs and funds, without any operational or regulatory burden. 

“We create customised strategies based on the thematic, economic, and sustainable preferences that companies have, based on internal and external needs. We then tailor the investment products in conversation with the companies, a process we call “Solutions Engineering,” based on the preferences and regulatory requirements,” adds Püllen.

The company redistributes fund earnings among the involved parties and gives distributing companies a larger share of the ETF and fund market. 

Specific use cases include:

• Use own investment products for internal deposit use and treasury management, 
• Diversification of the investment offering via own ETFs
• Increasing the profit share of existing fund concepts

Naro’s product range includes ETFs, index funds, and money market funds.

Revenue stream

Furthermore, Naro’s potential client base, which includes brokers, financial platforms, insurers, and (neo-)banks, can benefit from a new significant revenue stream while safeguarding their assets and maximising their capital potential.

Talking about Naro’s revenue model, Chris reveals “We are earning part of the management fee that the user is paying for the respective ETF or fund as it is the normal case for asset management companies. The other part of the management fee is being earned by our customers, giving them a way bigger share than the kickback fees that they get from external ETF or fund providers.”

The investor

La Famiglia (now part of General Catalyst) is a European seed and growth-stage venture capital fund investing in technology companies that enable or disrupt large industries. 

Judith Dada, Partner at La Famiglia (now part of General Catalyst), explains the investment in Naro and says, “The founders of Naro impressed us right from the start with their vision for a modern and fairer fund infrastructure. While many areas of the fintech market have undergone significant transformation in recent years, fund infrastructure has remained largely untouched by digitalisation. This market, which is worth 150 billion euros in the EU alone, is now ripe for disruption.”