Canoe, a startup serving the alternative asset space, raised $25 million in Series B funding led by F-Prime Capital.
Why it matters: Investors have embraced alternative assets, but lack digital tools to properly track all of their capital across the heavily paper-based space.
Background: Private equity firms, venture capital firms, hedge funds, and credit players produce vast amounts of paperwork updating investors on performance and requesting capital calls.
Yes, but: Most of it is still done via PDFs and lacks standardization — forcing limited partners to hire sizable teams to collect documents from various funds and to systematize data.
- Canoe’s service will automate much of the back office work.
How it works: Canoe automates that process by pulling the documents from various funds on behalf of LPs and using machine learning to standardize the information within.
- “I know this may sound a little comical, but one of the huge challenges is just finding all of your capital calls or distribution notices,” says Canoe CEO Jason Eiswerth. “Especially if you invest in 100 or even 1,000 different funds… because different funds name them different things.”
- Canoe therefore can act like a central portal for LPs to track their GP investments, getting alerts for instance when capital calls come in.
- Canoe also allows clients to systemize over 100 data points, which can then be used for investment analysis, accounting, and reporting.
Of note: Canoe’s started out with targeting LPs and LP-related services, with customers now including BNY Mellon, State Street, Carlyle, Blackstone, and JPMorgan.
- Blackstone and Carlyle are also investors in the company.
- More recently, the company’s clients have grown to encompass GPs and third-party data reporting systems.
Bottom line: The alternative investing sector has been a fast growing industry that is expected to surge from $9.3 trillion to $18.3 trillion by 2027, per Preqin. A bevy of fintechs see opportunity in both bringing consumers into the fold and in selling to the larger players in the space.