In a defining moment for retail investors, Frec, a financial technology company, has emerged from stealth, boasting a robust set of automated, self-service investment products.
Distinctively, Frec seeks to deconstruct and streamline intricate investment offerings that have typically been the preserve of wealth managers, enabling them to permeate the retail investor landscape with unprecedented accessibility and simplicity.
Bathing in the fresh influx of $26.4m, raised through a combination of seed and Series A funding, Frec has been propelled forward by notable investors. Greylock has assumed the mantle as lead investor, with the investment round further bolstered by the involvement of Social Leverage, amongst others.
Delving deeper into the mechanics, Frec’s inaugural product, dubbed “Frec Direct Indexing”, presents itself as a trailblazer among direct-to-consumer offerings. It facilitates customers in tracking S&P indices, thereby intertwining the advantages of index investing with supplementary tax savings and tailoring capabilities. This unique product can generate an additional 2.11% on top of market returns annually, through an adroit algorithm that performs daily tax loss harvesting, capturing up to 45% of an investment’s value in capital losses.
In terms of the fiscal utilisation of the new funding, Frec manifests a firm commitment to its mission: the democratisation of access to refined financial products. Furthermore, the investment is anticipated to fuel the development and optimisation of their groundbreaking products like direct indexing, portfolio lines of credit, and high yield treasury funds, enhancing their potential to steadfastly support investors amid market volatility.
Additional products have also been revealed by Frec, most notably “Frec Treasury”, which offers up to 5.02% on cash and is notably characterised by its high liquidity and low risk, with an additional layer of insurance for customer reassurance. In addition to these, Frec has introduced portfolio lines of credit, allowing customers to borrow against a percentage of their stock holdings, and announced a noteworthy partnership with AngelList to power money market funds for venture capital funds, intrinsically embedding themselves within the venture capital ecosystem.
Greylock Venture Partner Josh McFarland asserted, “Frec is on the precipice of truly democratising access to sophisticated investment products, so for us, getting into business with them was a no brainer.” McFarland’s optimism permeates his further observations, noting that the timing of Frec’s launch, given the projected growth of direct indexing, is impeccable, thereby solidifying a promising alliance with the visionary founder Mo Al Adham and his team.
Founder of Frec Mo Al Adham elucidated the company’s mission and motivation by stating, “We made it our mission to build a modern, self-service platform that enables access to advanced financial products, like direct indexing, portfolio lines of credit, and high yield treasury funds to help them stay invested, even in a volatile market.”
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