8 Securities informed Tech in Asia today that it is in the process of closing a new series B round. The Hong-Kong based financial trading startup had previously targeted only US$5 million but changed the game plan in order to have enough funds to broaden their scope of marketing. 8 Securities Group CEO Mikaal Abdulla says investors Velocity Capital and Leitmotiv Private Equity participated in this round and were joined by American and Chinese financial technology firms. 8 Securities has raised US$9 million so far but is looking to bring a Japanese investor onboard before closing the round at no more than US$12 million.
Now managing US$760 million in customer assets, 8 Securities has shown strong growth since debuting in late 2011. The round of funding will be earmarked almost entirely for growing the customer base in Japan. 8 Securities is betting that growth will be accelerated by its latest products, a wealth management service called Automated Portfolio which launched today and a Social Trading Portal slated for release in early Fall.
For the Automated Portfolio, Abdulla explains that users will take a short quiz to determine the goals, risk level, and expected length of their investment. Then, 8 Securities will be able to create a portfolio for the user, drawing on 16 global exchange traded funds. The minimum portfolio size is US$7,000 and the fee is only 0.5% (without tax) of the portfolio’s average value for the year.
The Social Trading Platform is live outside of Japan, and Abdulla’s team has been working on bringing it to Japanese consumers for months. When completed, it will be an opt-in transparent investing social network. Users will be able to see who invested in what and when. Anonymous avatars will be available, but the rating attached to those avatars will be based on real data.
Mikaal Abdulla, Group CEO of 8 Securities says, “We are building innovative, online and affordable investing services for Japan’s young, socially connected and mobile generation. [They] are being largely underserved by competition that is focused almost exclusively on affluent and older customers.”
The Automated Portfolio in particular could find a welcoming audience among young people in Japan. Wealth creation and management is becoming a critical skill for survival. Financial security used to be taken for granted since employees would be practically guaranteed life-long employment at a single corporation and a healthy pension check at the end of their careers.