Business Scaling

Titan CEO Is Looking for Acquisition Deals to Bulk up Tech, Talent

  • Titan wants to acquire a fintech that can help scale its business.
  • Co-CEO Joe Percoco said struggling startups will likely be looking for an exit in coming months.
  • The company plans to go on a hiring spree to fill out its compliance and investment teams.

Investing startup Titan’s looking to absorb a few fintechs to scale up, co-CEO and co-founder Joe Percoco told Insider in an interview. 

The fintech — which pitches itself as the asset manager to millennials and Gen Z — wants to grow its customer base, product suite, and talent, and it sees acquisitions helping with that goal. The company isn’t in talks with anyone yet, but Percoco said he likes the prospects of fintechs that either have solid product and engineering teams, a large customer base for product distribution, or developed something unique.

The startup, which manages $792 million in client assets, is keeping its eyes out for potential deal opportunities that Percoco expects to arise this fall. 

“Right now everyone is reacting to what’s happening in the market,” said the co-CEO. “And after the summer, people will make the hard, look-in-the-mirror decisions: ‘Do we have what it takes to go on or do we have to partner in some way?” 

Titan, founded in 2018 by Percoco, Clayton Gardner, co-CEO, and Max Bernardy, chief technology officer, has grown from a staff of 30 this time last year to 125 employees. It poached product and engineering talent from the likes of Uber, Facebook, Affirm, and women-focused wealth startup Ellevest. And it’s expanded its c-suite this year to include Personal Capital’s former chief compliance officer, Allison Amadia, as its chief legal officer; Affirm’s former head of consumer product, Nupur Kantamneni, as its vice president of product; and LinkedIn’s former data science manager, Vangelis Dimopoulos, as its head of data science and analytics. 

The company is looking to scale further. To bolster its tech, Titan is looking to hire more engineers, product managers, and designers. On the financial services side of the business, the company is recruiting for compliance, legal, brokerage operations, and investment management, specifically crypto and equity specialists.

Titan has four strategies investors can choose from. There’s a flagship strategy dedicated to US large cap stocks, a strategy for small and mid cap stocks, a crypto strategy, and a strategy for exposure to international stocks. 

Percoco said the company seeks to add more asset classes like real estate over time. He declined to reveal what other strategies Titan will offer, but he said the company is looking to adopt the Yale endowment model, an investment strategy developed by the late David Swenson, famous for bringing Yale’s endowment from $1 billion to $31 billion, which emphasizes investments in equities over bonds and allocates to alternatives like hedge funds, venture capital, and private equity. 

“Titan’s going to fill out that part of the pie for everyday people where historically they’ve only been told, ‘Just invest in stocks and bonds,” said Percoco.

Part of Titan’s appeal to Gen Z and Millennials is that it offers actively managed strategies for lower minimums than the six-figure industry standard. Its crypto strategy that launched last August was down 70.7%,  year-to-date, as of June, while its benchmark, Bitwise 10 Large Cap, was down 67%, over the same period. Crypto has been hard hit this year, with the price of the largest digital asset, Bitcoin, falling 50% over the year. Its other strategies also trailed the market in the first half of the year.

Titan made headlines last summer when its $58 million Series B funding round led by Andreessen Horowitz included some Hollywood names such as Will Smith, Jared Leto, and Kevin Durant. The company was valued at $450 million and Percoco told Bloomberg he expected assets under management to reach $1 billion by the end of the year. A regulatory filing from August 2022 shows the company is just shy of $800 million.

The company has raised over $75 million in total capital, but doesn’t expect to raise more this year because it’s comfortable with its revenue, Percoco said.

https://www.businessinsider.com/titan-ceo-interview-percoco-fintech-acquisition-investment-2022-8

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