In a striking move for the fintech world, Cologne-based startup Naro has just wrapped up a €2.7 million pre-seed funding round, signaling a bold step towards democratizing the creation of Exchange-Traded Funds (ETFs) for companies. Spearheaded by leading European investors including La Famiglia (now under the umbrella of General Catalyst) and Discovery Ventures, this round also saw participation from the entrepreneurial minds behind European unicorns such as Flix and Forto. Not to mention, the investment drew interest from a plethora of VCs like Angel Invest and Robin Capital, alongside seasoned fintech operators from notable names such as Liqid, N26, Plaid, and Trade Republic.
This injection of capital marks a pivotal moment for Naro, setting the stage for a significant upgrade to its fund infrastructure. By weaving strategic partnerships, clinching necessary regulatory licenses, and enhancing its tech framework, Naro is on a mission to craft an all-encompassing European fund ecosystem. This ecosystem is designed to empower companies to launch bespoke, tech-driven funds that cater perfectly to their unique requirements without the hassle of operational or regulatory headaches.
Naro is tearing down the barriers to investment product creation, allowing companies to craft their own ETFs and funds with ease. This innovative approach not only redistributes fund earnings more equitably among stakeholders but also opens up a larger slice of the ETF and fund market pie to these companies. By enabling businesses to bring their investment concepts to life, Naro is challenging the traditional, one-size-fits-all model that has long dominated the sector. From ETFs to index and money market funds, Naro’s offering is as versatile as the investment goals it seeks to achieve.
Whether it’s leveraging investment products for internal treasury management, diversifying investment options through proprietary ETFs, or increasing profits from existing fund concepts, Naro is set to redefine how companies interact with the financial market.
The genesis of Naro, founded in 2022 by Chris Püllen and Nils Krauthausen, was driven by a desire to rectify the imbalances of the current financial system. Despite the burgeoning growth of ETFs in Europe—which soared to a staggering 1.5 trillion US dollars by the end of 2022—the traditional ETF and fund models have often overlooked the needs of distributing companies. This oversight has led to diminished interest rates, inflated fees, and subpar investment products, forcing companies into restrictive monetization models or leaving them with a mere fraction of potential earnings. Naro stands as a beacon of change in this landscape.
Püllen articulates a vision where access to equitable and sustainable wealth-building solutions becomes a standard for both individuals and companies. He emphasizes the necessity for investment products to be tailor-made to the specific needs and aspirations of the companies they serve. Echoing this sentiment, Judith Dada, Partner at La Famiglia, lauds Naro’s founders for their innovative vision of a fairer fund infrastructure. She points out that despite the rapid evolution of the fintech sector, fund infrastructure has largely remained untouched by digital transformation—a gap Naro is poised to fill.
As Naro forges ahead, its target market—encompassing brokers, financial platforms, insurers, and neo-banks—stands to gain a lucrative new revenue stream or bolster their asset protection and capital maximization strategies. Puellen concludes with a call to action, aiming to shift more fund earnings towards “Main Street” and enhance the adoption of investment products across the board.
Naro’s journey from its inception to this successful funding round is not just a testament to its visionary approach but also a signal to the financial world that the future of fund creation and management is ripe for innovation.
