Algorithm-backed stock advisor Delphia has raised $60 million in a Series A funding round led by Multicoin Capital. The funding will be used to expand headcount and to launch the native Delphia Data rewards token.
Additional investors in the round included Ribbit Capital, FTX Ventures, Valor Equity Partners, FJ Labs, Lattice Ventures and Cumberland, among others.
Delphia’s mobile app offers actively managed, long-only strategies with no fees and $10 minimum investments. The adviser also has a hedge fund for accredited investors that has a long-short market neutral strategy covering about 2,500 U.S. equities.
“We're going to try and use lots of data to make predictions about where the companies are going, and we're going to try to perform above average,” Delphia CEO Andrew Peek explained during an interview with CoinDesk. “It's very hard to do in practice, but that is essentially the decision: Do you want to aim for average or do you want to aim for above average?”
The Delphia algorithm forecasts fundamentals for thousands of publicly traded companies and maps those predictions back to an expectation of the stock price, but it does that at eight different horizons, said Peek.
“If you're in the business of predicting fundamentals more accurately, you can unpack that into KPIs and downwards into the consumer trends in the market that are making up those KPIs,” Peek explained.
Starting this summer, Delphia will start offering a Delphia Data token to reward users willing to share personal data with the adviser.
“We think of consumer data generally as giving a signal about demand, but actually when you have a line with the individual providing the data you can get things like LinkedIn data or things that are not commercially available, which might point to other parts of a set of financial statements,” he continued.
Investors will need to have a Delphia account and “some skin in the game” (though that could be as low as $25) to be eligible, said Peek. The tokens are earned when a user connects whatever applications on their phone they feel comfortable sharing with Delphia.
The collected data could include Amazon purchase history, credit card transactions, LinkedIn, Venmo, Clickstream or other social media apps.
The reward is an ERC-20 token, which means it’s freely tradable. Token holders will also have access to membership benefits regarding financial products and services, such as a reduction in fees or early access to a new product.
The rewards token is intended to help with Delphia’s overall goal of bridging the gap between retail and institutional investors.
“It starts with the forecasting advantage, which is an institutional-grade forecasting advantage … we have institutions who do pay full fees to access a different version of this strategy,” said Peek. ”Those fees are redistributed back to those contributing the data.”
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