Mark Swan: CEO & Co-Founder at Nevis announcing their $35m Series A led by Sequoia!

0:00Mark Swan:Hello and welcome back to the Scaling Europe show. I'm Seb Johnson. I'm here with Mark Swan. Mark, you've just announced a whopping$35 million Series A led by Sequoia. Congratulations. How are you feeling? Yeah, thank you so much. And thanks for having me on, Seb. I'm a big fan of Scaling Europe. And so it's exciting to be on the show. Absolutely. Pleasure. It's a pleasure to have you. It's a super, super exciting funding round. $35 million is no small amount. You've raised this for your sort of like AI wealth management tool platform, Nevis. Can you touch a bit about what it is that you've built?

0:31Yeah, absolutely. So Nevis is an AI platform for wealth management. So we build purpose-built AI products and tools to help financial advisors to better serve their clients. Today, advisors across the US and globally are spending 80 % of their time on admin. And so we're building an AI platform to help streamline that admin so they can serve many more clients and really make a big benefit to the clients that they currently serve.

0:57Mark Swan:Amazing. And you're live already with customers. Can you talk about who you're live with, where you're live? What kind of problems are you solving for them? Absolutely. So we founded Nevis at the end of last year. At the beginning, we were focused on both the UK and the US markets, but we have since doubled down and focused purely on selling to the US. Today, we are partnering with some of the largest and fastest growing wealth management firms in the US. collectively across the customers that we currently serve. They manage over 50 billion of assets. So these really are some of the largest wealth management firms.

1:33Some of those include firms like United Capital, Apollon, GC Wealth, and so on. And our customers really represent the different aspects of the market. And so we have national firms with tens of thousands of advisors servicing clients who have, let's call it, you know, high net worth between a million and five million in assets, all the way up to some of the, you know, largest multifamily offices who are serving ultra high net worth clients who have, you know, 100 million plus. And so we really kind of are working with customers across that spectrum. And we're incredibly, you know, lucky to be partnering with such amazing firms so early in our company journey.

2:14Mark Swan:Amazing. And what made you decide that this was the problem that you wanted to solve? Look, I have a thesis, which is that service businesses are going to be the biggest benefactors of AI and what is coming out of AI. Why? Because AI unlocks so much opportunity to help streamline a lot of the operational workflows that, you know, professionals and professional service people across, you know, legal accounting, wealth management and so on. And if you look within the financial services space, wealth management is the area where actually the admin burden is the highest. For every one financial advisor, they are typically supported by a number of administrative and operational staff who are doing the day-to-day work, the busy work around servicing clients.

3:04And so what we saw as the opportunity in this space was to be able to build a platform for them and to help them grow. And I think that wealth management particularly has an amazing macro tailwinds behind it. Number one, demand for financial advice has never, ever been higher. In the US, there are 50 million clients who last year were getting served by professional financial advisors, and that is growing rapidly. And the number of affluent households, so people who have more than half a million in assets, is growing eight times faster than the rate of the population. And so demand has never been higher.

3:42The problem is actually on the supply side. There are more advisors retiring than coming into the industry. And where companies actually have tried to approach this in the past is to leverage AI to replace the advisor, right? So like robo-advisory and try and replace the advisor. And we think that that approach is completely wrong. And the reason why is because clients are, number one, trusting their whole life savings to this advisor. But also, number two, they're going to an advisor to help them navigate some of the most important life decisions, planning for retirement, putting their kids to college, this type of thing.

4:18And so we believe that financial advice will always be human-led. The problem is this admin burden. Advisors are spending more than 80 % of their time on admin. And so the opportunity in this space is help build an AI platform or build an AI platform to help streamline the administrative work of a financial advisor's day to day. And that will help unlock all of that capacity so they can be serving many more clients and many more people can be benefiting from professional financial advice as well.

4:46Mark Swan:Yeah, it's interesting. You talk about the growth in that sort of affluent class and robo advisors, whatever. However, that thesis was such a big thesis within fintech a few years ago, right? You saw so many wealth techs cropping up to kind of capitalize on the opportunity of those people talking about the generational wealth transfer from baby boomers to millennials and below. And there's a very rapidly growing group of people who are going to be very, very affluent, but who are tech savvy. And so the idea of the thesis was people like Nutmeg or Chip or whatever to try and build tools for them.

5:15Mark Swan:But the approach that you're taking is actually people are always going to want to have that personal relationship. What you've got to do is you've got to equip the people with the tools to best serve their customers. Exactly. And I think that I think what people kind of naively think in this wealth management space is that the average client only cares about performance. And that's actually not true. They care a lot about service. And they care about what more can my financial advisor offer me from comprehensive financial planning to helping with my taxes to helping with estate planning. And really the list goes on.

5:53And so you're going to an advisor because they offer that full suite of products, which you cannot simply get with a robo-advisor. But also the trust element is super important. You want to be able to pick up the phone and have a conversation with your financial advisor to help you navigate some of those most important parts of your life, as I mentioned. And so we believe that those moments will always be human-led because of that high-trust relationship-led part of financial advice. And again, we don't think that will ever change.

6:30Mark Swan:And how are you getting into the real weeds of what you can automate, what you can use AI for versus what's never going to be AI-ified? How are you getting to learn the real ins and outs of the day in the life of a financial advisor? We spend literally countless, if not hundreds and hundreds of hours with financial advisors every single day. You know, from the moment that we founded Nevis to now, you know, my calendar is full with, you know, working with financial advisors and understanding their workflows, right? Understanding where are the burning problems, where are the areas to automate? And, you know, we have prioritized Nevis' roadmap specifically to help unlock those, you know, highest burning areas, right?

7:16And so we feel like we have a very deep understanding of, you know, what can deliver the biggest impact to the wealth management firms that we work with. and the market as a whole. And so, you know, we feel like we have a very good ear to the ground in terms of where the problems are and where the opportunities are to streamline with AI.

7:33Mark Swan:And what's the reaction been from some of your early adopters? Incredibly positive, right? You know, as I mentioned, we work with some of the really largest firms and fastest growing firms in the US. The biggest impact, you know, we see is that, number one, you have several hours that are being saved every single week and helping streamline a lot of core workflows. like helping advisors prepare for meetings and streamline a lot of the follow-up post-meeting with clients. And there's going to be a huge opportunity as we move deeper into the middle and back office and the operational workflows there.

8:07And that's where you're going to really unlock a lot of this operational leverage for the firms that we work with. And so we've got a lot of exciting new products coming out next year and a lot of, you know, a large roadmap that we are executing against. And with every one of those new releases, we are going to be unlocking more, you know, hours saved and operational leverage so firms can grow assets but not have to grow headcount of their team. In other words, advisors can start managing more clients with the same team that they have.

8:37Mark Swan:And what balance would you say at the moment you're striking between being product focused to kind of fill more of those gaps or to automate more through back office processes versus now being at the point where you're ready to go to market and scale and sell you know you know where up where's the balance lie at the moment are you still thinking we've got so much more to build until we can capture a lot of the market or have you got to a place where you're thinking we're saving enough core use cases that we could just sell this for a period of time and keep building in the background but that enough is a solid product yes scaling is always a little bit like a two by two matrix right you've got to you have a product you have something that is adding value and that's what we have today.

9:18And for that, you scale. You scale across the market and you sell to every REA across the US and get them to have the same benefits that our customers today have. So dimension number one is scale number of customers that are benefiting from Nevis. But equally and at the same time, you're also scaling the depth of the product offering. And so we are going to be building rapidly more and more modules, which are added into the Nevis platform so that we can begin automating more workflows and delivering more value to our customers. So you always have to do both.

9:53Mark Swan:Yeah, yeah. I want to talk about the round itself. So Sequoia's led this round. They also led your seed, if that's right. Correct. So we have three investors who were invested in this round in 35 million Series A. We have Sequoia Capital, Iconic, and Ribbit. Sequoia, I think, needs no introduction, and actually probably nor did the other two as well. But Sequoia backs some of the really category-defining firms, and so it's a true privilege to be working with them and having worked with them from the very beginning in our seed round. Iconic know this wealth management space better than anyone. They are a leading venture capital and growth-focused firm.

10:30but they also have one of the leading wealth management firms or run one of the most leading wealth management firms serving some of the most respected families across the US. And then Ribbit, they know this fintech space better than anyone. They really are the leading fintech investors. And so we think that they're the perfect trio to begin to support Nevis and really kind of take us to this next level. And so we're incredibly privileged to be working with all three of them and have them on board.

10:58Mark Swan:And what would you say unlocked this round? What was it that gave the investors a conviction that they needed to come with you on this journey? We're accelerating fast. Velocity, velocity, velocity. We're working with some of the top customers and we think that now is the right time to actually come out of stealth, help many more customers and continue to execute at speed with all of the products that we're building. And so this really gives us that ability to accelerate and continue to ship product and also benefit more customers as we expand. And really, that was what we saw as part of this round and what they saw on the opportunity as well.

11:39Mark Swan:And why was now the right time to come out of stealth? You've obviously been building a stealth for a while, seeing good traction. What made you think, OK, this is the time that we are ready to go big in the market? Yeah, the pool is so strong. You know, our website before, you know, we launched was a video of the Scottish Highlands that said nothing other than request a demo in the bottom right. And I had dozens of signups every single week reaching out to me and asking, what is Nevis? We're very interested. We keep hearing about it. And when you get such a pool in validation, you have to come out.

12:14And the opportunity is so strong that we want to take, you know, advantage of that. and also really make sure that we're benefiting a huge market out there. And so there are many more firms that can benefit from Nevis, and so we want to be helping them. And the pool is so strong.

12:30Mark Swan:And was that word of mouth? Was that advisors telling other advisors about this? Yeah, primarily word of mouth, yeah. Wow, that's amazing. What more validation could you ask for, right, than your existing pilot customers telling other people? I also want to talk about your background, right? All three of you, the co-founders, you're all ex-Revolute. Yeah. But honestly, I probably, you know, I've only been doing these fundraising interviews for about three months. And it's like most of them are ex-Revoluters. Like almost every other week, we're seeing another group of amazing ex-operators come out of Revolut, raise a big round to tackle something generally in the fintech space, but not always.

13:05Mark Swan:You know, we're talking about Allen and Fuse. What is it about Revolut that is creating this whole new ecosystem of operator-turned-entrepreneurs? it's an incredible first of all it's an incredible company right number number one and so but number two it was an entrepreneurial spirit right you know i always talked about revolute being in a fantastic meritocracy it didn't matter who you were um you know what your role was if you delivered value you know you got promoted and you got more responsibility and i think that type of culture breeds a level of entrepreneurship um and whether that is you know alan chang from going and finding Fuse, Fernando Torres, you know, with Dollar App, like there's incredible, incredible people who I think thrive in that environment.

13:52And that environment was created by Nick, you know, and the founders and Vlad as well. And it's a phenomenal place to be. You know, when I decided to join Revolut, I knew honestly exactly what I was going in for. I wanted to get that, you know, very fast acceleration of career growth, but a lot of, you know, opportunity, of responsibility and ability to deliver impact. And that was exactly what I had. So it was an amazing place. And it's no surprise to me that it's a founder factory. If you could just create an ETF of ex-Revolute founders, it could be quite positive.

14:26Mark Swan:Yeah, and I actually know some people who are ex-Revoluteers who were senior or who have done really well now who pretty much just exclusively invest in people they know from Revolute. and you look at their portfolio and it's an amazing portfolio. I think there's also a unique combination of what Revolut taught you was to really be really focused on, you know, there was a core value of deliver wow and deliver really exceptional products and, you know, have incredible product taste and really understand what the end user wants. And so I think on one side of the spectrum, you've got this just amazing taste product, product, deep focus on high quality.

15:07But then on the other side, it's all about execution, execution, execution, right? And execution eats everything else, right? And I think that Revolut was a place where both of those things were held very important. And as a result, I think a lot of people learn that playbook of build amazing products, execute aggressively and do that to grow fast and ideally build big businesses.

15:35Mark Swan:And that's what you're applying today, I guess? Yeah, exactly. I founded the business with two of the smartest people I've ever had the privilege of meeting, honestly. I worked closely with both Philippe and Ivan when I was at Revolut. Philippe was a partner at Revolut. He was leading several of the AI initiatives and was essentially head of AI on the consumer side by the time we left. And then Ivan was the general manager of the whole retail department, which essentially was the consumer application. And so I was very lucky for them to come and find the business with me, and it's a real privilege.

16:13And so we have that DNA of very strong product sense, and my co-founders are some of the best product people I've ever seen, and I think in the market. But we also have this very focus on execution and delivery and speed and velocity. And that means that we execute hard. And we think that will benefit your business over the long term.

16:38Mark Swan:How did you know when was the right time to kind of pack up and do your own thing? I have this theory on S-curves, which is everything is essentially an S-curve. You're either growing or you're slowing. right? And for me, I actually joined Revolut straight out of university, right? I joined initially as a junior operations manager at Revolut. And, you know, my goal was learn as much as I possibly can, and really kind of hold on in this rocket ship and gain a lot of experience. But I always knew that at some point, I would want to leave and find my own business, right? Even before going to Revolut, I knew I'd be a, you know, want to be a founder.

17:23And so I think I got to the point where I was reaching the eclipse of the S curve. And that was the moment for me that I felt that now is the right time to find a business. And in parallel to that, AI and what was happening post the ChatGPT moment, I think unlocked this whole new opportunity to build in areas which I was deeply interested in, like wealth management. And so I think it was the coming together of a lot of different factors like that, that meant that now was the right time and

17:52Mark Swan:um you know no phone nervous amazing and looking back you know you're what a year just over a year into this would have been you know i guess like that the biggest highlight maybe a moment where you've broken through with the product or you signed your first customer or some some bit of magic has happened where you're like okay this is going to work we've built something meaningful and then on the other side i'd like to hear about the lowest point where you're like banging your head against the wall and you just got to push through? Yeah, look, I think that the high points I can think of to I mean, getting our first customer and you know, is incredibly important, right?

18:28I think we knew that there was validation in this market. And one of our first customers was, you know, almost a 24 billion assets under management, wealth management firm, very large firm. Yeah. And to secure that, you know, type of customer is incredibly important and a lot of value you can deliver in that type of firm. And then I think that the second highlight is then actually launching with that customer really at scale and being able to show the value. And I'm a metrics guy. Being able to see the dashboard and just see every positive metric go up and to the right, they're positive moments because you identify the opportunity, you spend time to go through the problem.

19:10you then match that with a product that helps solve those problems. And then you actually see it all the way come through and you see the value that has been added and the feedback that we get from advisors and also from just broadly the customer. And so I think those two moments, just to see the sequence of that in such a short space of time is very impactful. I think in terms of low moments, I think that we spent a lot of time initially trying to decide whether we would focus initially sales on the UK and on the US. And, you know, we started initially actually looking at the UK as a market, which has all the same problems, right?

19:49You know, UK wealth management firms and actually European more broadly, you know, it's a global problem. Admin is a burden for all wealth managers. And I think that we spent quite a lot of time initially trying to understand, do we take a bet on the UK initially and scale and build up the product here and then go to the US? Or should we take the bigger initiative to sell to the US initially, which is a much larger market, a little bit more unknowns initially? And I think that period was just exciting, but also a little bit uncertain. And we spent a decent chunk of time to make that proper decision.

20:28And we got such a strong men pool from the US that it was a no-brainer for us. the market so big, the willingness to buy was so large. And so we wanted to benefit all those REAs that really needed and wanted our product and we could service that. So we ended up, yeah.

20:44Mark Swan:Was there a real noticeable difference? One of the things I speak to a lot about founders who are scaling in Europe and the US is essentially procurement and willingness to try and test new tools and their risk appetite for new technology is a lot better than in Europe. Was that something that you faced as well when speaking to different wealth managers in the UK versus US? Yeah, look, I would say so. I mean, like in the US, there is just much more of an entrepreneurial spirit generally. You know, wealth managers typically actually founded the business themselves. They're founders themselves. They understand, you know, the kind of hustle of being a founder and what it means.

21:21And I think that, you know, contrast that to the UK, I think there's less of that there. And so I think it was easier to actually resonate with that entrepreneur, CEO, wealth manager who was based in the US, who was much more open to trying out new tools and really trying out different things to help them serve their clients better and grow as well. I think the macro of wealth is much stronger in the US than it is in the UK. And just as a function of the economy is growing faster and so on. And so for all of those factors, someone once said to me, don't climb ladders, ride waves. You've got to kind of pick the right macro wave.

22:04And I think the US wealth management wave is an incredibly strong one to be building a business in. And so the pool was so strong.

22:11Mark Swan:So how helpful, if at all, was it to have Sequoia lead the seed? You know, having that brand behind you, did that carry weight in those early customer calls? Of course. Sequoia are probably hands down the number one VC in the world. Yeah, I think I think there's you know, it's you can say that type of statement without being too controversial. I think. And the value that they bring in those early points where you're navigating setting up the business are so strong. And we're incredibly grateful to be partnering with Luciano Alexandru, George Robson, but just also the broader Sequoia team. It's really, truly phenomenal.