At SPEEDA Edge we've focused sharply on emerging technology industries in the financial services sector during the second half of the year. We're rounding out that coverage today with an interview with Anton Padmasiri, CEO of WealthOS.

WealthOS is a pre-Series A startup that provides the infrastructure to quickly develop and deliver wealth management products, whether you're a bank, a FinTech, a traditional wealth manager, or any kind of startup trying to enter the industry.

Padmasiri spoke with SPEEDA Edge to explain how his business works and where it fits into the digital wealth management and financial services landscape. He also delivered a useful overview of the UK FinTech scene and a compelling vision for the future of the industry.

SPEEDA Edge:

Let's start with who you are and what you're working on.

Hi, I'm Anton Padmasiri, I'm the CEO and founder of WealthOS. We’re a core wealth management platform built with a singular vision of significantly reducing time to market and costs associated with building wealth products. That makes us an infrastructure platform that enables different digital  use cases to be built quickly and run efficiently.

Our customers are different types of wealth management organizations whether you're a robo-advisor, traditional bank or wealth manager, a neobank, or a Robinhood-style digital brokerage. We provide the core feature set that goes into running these types of value propositions so you can take the features that we offer and arrange them to support your value proposition. We provide that underlying technology infrastructure.

Getting specific on those features, are these things like client communications, fee management, anything to do with taxes? What types of features are you offering? 

The core is the investor, account, holdings, and transactions modules. So, if you think about a solar system, this is a bit like the sun. We need to have an investor record, they need to have accounts, and their security holdings need to be transacted. The other modules, such as tax wrappers, portfolio management, rebalancing, fees, or client communication, orbit around the core. If you want to run an IRA in the US, for example, the rules engine that you need to correctly administer those products orbit around this core platform. 

You mentioned the US, but currently, you're focused on the UK market. Do I have that right?

We are founded in the UK and are very much focused on the UK market, but I'm really happy to break to you that we will be going live with a North American client based in Canada in Q4 or Q1 2022 at the latest. 

Can I get a name? 

Unfortunately, I can't mention the name as it's embargoed, but it's an excellent opportunity for us to showcase our platform's global portability. Because we've architected our platform to abstract regional nuances, no matter where you're launching, you will inherit the right set of rules and configurations for that jurisdiction. 

Congratulations! That's exciting news. So you just previewed a little bit of this quarter and the next, but if we could go back to the beginning of Q2 when you raised your seed round, what was that process like?

We launched our private beta at the back end of 2020. We built it, and the idea was to take this on the virtual roads to validate product-market fit. And the response was great. I come from a wealth management background and have found the process of building digital products challenging, so it was reassuring to have the industry validate our idea. As part of that process, we received investor interest, so we decided in Q1 to pick a good set of investors who would add money plus value. We are pleased to have onboarded a good group of people onto our cap table. 

What did that seed round allow you to do that you weren't able to do before?

The purpose of the seed round was to move from the private beta into a production-ready minimum viable platform. And that's when we won our first client. Building a product in a vacuum is one thing, but having a client allows us to refine our roadmap and build a richer product.

If I understand correctly, WealthOS is both a platform and an API, and those are both in private beta right now?

We have moved it from private beta to a sandbox for testing with our client, but you're right. We have our platform, which is serverless and cloud-native, fully on AWS. We also have an API and WebSocket layer that allows you to easily connect the digital experience to the platform. We've highly granulized the APIs in a way that is business contextual. 

We are also building an integration marketplace where other FinTech apps can connect to the platform easily. Let's say, for example, KYC AML—instead of doing a lot of architecting, it's very easy to switch on particular providers and have them fully end-to-end integrated. 

It sounds like you have a developer focus. So, when you're working with a client or a potential client, at what level of the organization does the decision to adopt WealthOS take place? And what level is actually doing the implementation?

Decision making to adopt WealthOS sits at both the technology and the business leadership levels. The business leadership will want to get products and features out to market quickly. The technology leadership will want a robust platform that will ensure security and scalability. Of course, cost efficiency will be of primary importance to both. 

In terms of implementation, we have a strong developer focus because one of the biggest pain points I faced with my teams was the lack of documentation due to a lack of APIs. But because we are using cloud-native technologies, we can drop features into our clients' code base on an ongoing basis. This reduces not just the total cost of ownership but the cycle time for getting a feature out to market.

Would you be able to put some numbers on that? How many days or weeks it would take under the old model versus the new model and what a customer can expect to experience.

Padmasiri: 

In banking, where cloud-native platforms flourish, it's 70% faster to get a digital bank out to market and 95% cheaper. So, it's not around the edges—it's orders of magnitude faster. I'll give you an example. With our private beta, we wanted to build a mock wealth app to showcase what could be done with our platform. To build a relatively rich wealth app took us six weeks. Because with our APIs, wealth managers can focus on customer experience instead of back office technology integration.

So, like a dummy version of Betterment or Wealthfront or something like that?

Yes.

SE: Got it. So, you're still in private beta and looking at Q4 for announcing clients. That's essentially a public launch, right? By the end of the year?

Absolutely, so the first phase will see a digital platform built for Canadian financial advisors go live on WealthOS. 2022 will see us build out more features to support the UK market.

Big picture, the UK is very well known for a thriving FinTech scene with Revolut and Money Lion, and so on. And this is in part due to a unique set of regulations over there. How would you characterize the UK FinTech scene right now? Is that pace of innovation still going? Are you seeing it in new places? What does it look like on the ground right now?

London has always been ahead of the curve for financial services, whether it is the adoption of contactless payments or the minimization of check usage. And obviously, we've seen companies like, as you said, Revolut, Monzo, and Wise hit unicorn status. We also see an explosion of innovation in the wealth space. For example, organizations are trying to bridge the gender gap in pension, offering cheaper and mobile-first stock trading etc. There's a good ecosystem of investors, organizations, incubators, and accelerators. So, on the ground, it feels like it's the place to be—outside of the valley, of course.

So, changing gears, why did you decide to specialize in wealth management? I understand you have a professional background, but wealth management is often a feature of a larger offering. I'm really asking the "is it a feature or a product?" question now. 

Yeah, I have the scar tissue to show after trying to build digital products and failing miserably. The technology is 20 years old. So, it was a natural place for me to start and a complex enough problem to solve. Wealth management, even compared to banking, becomes much more difficult as the number of counterparties, and features increase. If traditional banking is behind the technological curve, wealth management is even further behind. For example, cloud adoption is still very low in wealth management. 

Across the globe, we are going to rely on private savings to maintain our lifestyles because gold-plated guaranteed pensions have become unsustainable. I believe it's a growing target addressable market (TAM) where WealthOS can provide the modern infrastructure needed to build the products and features to address this need.

Do you have a TAM that you use internally or in discussions that you'd be willing to share?

Something that we've used since about a year ago is the amount of wealth in investable assets and that’s USD 100 trillion as of 2023. But that's a broader number and there are verticals that you can go into.

So, as far as a business model goes, are you operating with a SaaS contract or is it a percent of assets under management? How are you handling billing?

We don't anchor our revenue to assets under management because our value creation has nothing to do with the size of your assets. In the enterprise model we charge for any implementation related work and the platform attracts a SaaS based subscription fee - based on the modules used by the organization. We are also coming with a startup model where organizations build and launch innovative products using our platform and pay as they scale.

Last on this line of questions—if you can get into headcount—you're the CEO and founder; what's the team look like?

All in all, we have about 25 humans working on a full-time, part-time and contract basis, predominantly on the engineering side. And we hope to scale that up significantly in 2022.  

I know that your seed round may feel like it just happened but companies are sometimes raising two in a calendar year; so, I'll ask if you're already looking towards a Series A.

Yeah, we've already started working towards our Series A, and we'd like to be in a position to close that within the next six months.

SE: Great, and good luck!