19 Thriving Hedge Fund Startups (2021)

by Josh Howarth - October 14, 2021

By the first quarter of 2021, global hedge fund assets hit a record-breaking $3.8 trillion. This was the best first-quarter performance for the industry in over two decades.

With the onset of cryptocurrency hedge funds, hedge fund managers are now creating new investment strategies, investment funds, and hedge fund startups.

We’ve rounded up some of the best hedge fund startups to keep an eye on in 2021.

1. Numerai

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5-year search growth: 37%

Search growth status: Peaked

Year founded: 2015

Location: San Francisco, CA

Funding: $27.5M (Undisclosed)

What they do: Numerai is a crowd-sourced hedge fund startup that utilizes artificial intelligence to create investment strategies. The platform is designed to let users apply machine learning algorithms to make the stock market, IPO valuation, and industry predictions. Data scientists who help build Numerai’s hedge fund receive payouts, mostly in cryptocurrency. According to their website, Numerai has paid out more than $83M to their users.

2. Fabriik

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5-year search growth: -100%

Search growth status: Peaked

Year founded: 2019

Location: London, United Kingdom

Funding: $32M (Series A)

What they do: Aiming to become a digital asset marketplace, Fabriik provides users a platform to trade, hold, and invest in crypto and fiat currencies. The company currently provides an online crypto exchange, digital asset manager, and a central market. In September 2020, Fabriik acquired Money Button to enhance their online payment systems.

3. PolarBear

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5-year search growth: -59%

Search growth status: Peaked

Year founded: 2019

Location: Bangkok, Thailand

Funding: $545.2K (Seed)

What they do: PolarBear100X utilizes financial robotics to manage funds. The company uses AI technology to predict and manage various hedge funds, crypto markets, and futures. Their website primarily focuses on PolarBear’s proprietary technology, ROBOLinked.Me—an open social ROBO investing network. The technology and platform have assisted in more than 77,000 ROBO trades to date.

4. Romano Capital

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5-year search growth: 53%

Search growth status: Regular

Year founded: 2020

Location: Vancouver, WA

Funding: $650M (Seed)

What they do: Specializing in real estate investments, Romano Capital aims to provide various alternative investment opportunities. Their investments range from land and commercial developments to housing units. Customers can invest in diversified perpetual evergreen investment funds or project-based offerings, based on their interests. In October 2020, Romano Capital raised $650M.

5. Polychain

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5-year search growth: 2800%

Search growth status: Regular

Year founded: 2016

Location: San Francisco, CA

Funding: $10M (Seed)

What they do: Polychain Capital is an investment firm that focuses on the blockchain asset class and cryptocurrency investments. The company participates in hedge funds and venture capital investments, investing in companies like Tezos and Kik Messenger. They utilize mathematical properties in their processes, such as game-theoretic equilibrium and cryptographic verification. As of June 2021, Polychain has $2B in assets under management (AUM).

6.Quantiacs

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5-year search growth: -100%

Search growth status: Peaked

Year founded: 2014

Location: Menlo Park, CA

Funding: $2M (Seed)

What they do: As a crowd-sourced quant platform, Quantiacs aims to provide a marketplace for investors and quants. The company hosts algorithmic trading contests where users can submit their algorithms. If any user’s algorithm positively impacts trading revenue, the user receives 10% of the profits. The startup allocates $2M to each contest, dividing the amount among winners.

7. SumZero

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5-year search growth: 0%

Search growth status: Peaked

Year founded: 2008

Location: New York, NY

Funding: $1M (Seed)

What they do: SumZero is an online community for professional investors and capital partners. Users can find peer-reviewed investment research and buy-side ideas to invest in hedge funds. SumZero runs on a post-or-pay method. Users can either pay for, or post, unique hedge funds and asset management research to gain access. In 2020, Alpha Sigma Capital partnered with SumZero to offer cryptocurrency research on the platform.

8. Titan

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5-year search growth: 650%

Search growth status: Regular

Year founded: 2018

Location: New York, NY

Funding: $73M (Series B)

What they do: As an investment firm, Titan offers capital management services through experienced institutional investors. The company claims to have veteran Wall Street investors, money managers, and fintech experts drive its investment management services. According to their website, Titan currently works with more than 30,000 clients, managing $600M in assets and investments.

9. Arkk Solutions

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5-year search growth: -100%

Search growth status: Regular

Year founded: 2009

Location: London, United Kingdom

Funding: $6.6M (Series B)

What they do: Arkk Solutions is a financial and portfolio management company that offers financial automation. Their goal is to make financial and regulatory reporting smoother for any current funds or investments. Furthermore, they offer financial automation for future investments and funds. According to their website, Arkk Solutions has 850+ clients across 20 countries.

10. Essentia Analytics

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5-year search growth: -100%

Search growth status: Regular

Year founded: 2013

Location: London, United Kingdom

Funding: $3.8M (Corporate Round)

What they do: As a financial services company, Essentia Analytics provides performance consulting and behavioral analytics services for assets. The startup aims to provide actionable insights, machine learning analytics, and performance insights without behavioral bias. Essentia Analytics’ website states that over $200B worth of assets is being managed through their services.

11. GenesisAI Corporation

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5-year search growth: 350%

Search growth status: Regular

Year founded: 2018

Location: Boston, MA

Funding: $4.8M (Series A)

What they do: A machine learning protocol, GenesisAI is working towards providing a central marketplace for AI services. The company offers various machine learning AI models to organizations that want to make use of AI tech, such as fintech companies. According to users, GenesisAI models help develop investment models and strategies for hedge funds. In July 2021, GenesisAI raised more than $2.5M in private equity funds.

12. CapShift

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5-year search growth: 9800%

Search growth status: Regular

Year founded: 2018

Location: West Newton, MA

Funding: $5M (Series A)

What they do: CapShift is an investment firm that offers investment solutions to small and medium-sized businesses. Their goal is to provide capital investments based on a business’s values, goals, and objectives. The firm’s services include investment research, partnerships, sourcing, and reporting. CapShift raised $5M in a Series A round in August 2021.

13. Digital Asset Management

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5-year search growth: 75%

Search growth status: Regular

Year founded: 2017

Location: Gibraltar, Gibraltar

Funding: $1.9M (Equity Crowdfunding)

What they do: As a digital asset servicing firm, Digital Asset Management (DAM) assists with crypto payments and asset tokenization. The company aims to provide a payment gateway that will enable online businesses to accept cryptocurrencies. DAM also offers an OTC platform, cross-border settlements, and smart contract management. According to their website, the startup works with over 350 merchants worldwide, with over $1B traded since 2019.

14. Delphia

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5-year search growth: 15%

Search growth status: Peaked

Year founded: 2018

Location: Toronto, Canada

Funding: $19.5M (Seed)

What they do: Delphia is building an algorithm that chooses stocks for investors. It aims to be a single investment strategy any user can utilize to improve their investments. According to their website, their process works by collecting users’ data, making improved predictions based on that data, adjusting investments, and improving their algorithm. In 2019, Delphia raised $15.4M from Black Jays Investments and 10 other investors.

15. Indiegogo

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5-year search growth: -72%

Search growth status: Regular

Year founded: 2008

Location: San Francisco, CA

Funding: $56.5M (Series Unknown)

What they do: As a crowdfunding platform, Indiegogo offers people a chance to find funding for projects, including hedge funds. The company focuses on offering entrepreneurs, private companies, and investors a platform to gather funds for their projects, investment funds, and more. In 2018, the company announced that it had helped users raise $1.5B through its platform.

16. Betterment

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5-year search growth: -48%

Search growth status: Peaked

Year founded: 2008

Location: New York, NY

Funding: $435M (Series F)

What they do: Betterment is an investment company and money management software that provides robo-advising services. The company aims to minimize investment risk and volatility through diversified investing. Their app enables users to track their investments, finances, and taxes to make informed financial decisions. In September 2021, Betterment secured $60M in a Series F funding round.

17. Axoni

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5-year search growth: 53%

Search growth status: Regular

Year founded: 2013

Location: New York, NY

Funding: $90.8M (Series B)

What they do: Based on a blockchain infrastructure, Axoni offers network and infrastructure services for hedge funds and financial services companies. The company claims that its infrastructure can synchronize information across fund markets in real-time. Enterprise customers are also offered workflow automation for complex ledger deployments. In 2019, Axoni was listed in the Forbes Fintech 50 list.

18. CAIS

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5-year search growth: 36%

Search growth status: Peaked

Year founded: 2009

Location: New York, NY

Funding: $81M (Series B)

What they do: CAIS is a fintech platform that aims to be the leading hub for alternative investments. As an open marketplace, it allows asset managers, investment advisors, and private equity investors to engage with customers, as well as with one another. The platform’s investment options include hedge funds, structured notes, and private real estate. CAIS announced in November 2020 that the startup received $50M in Series B funding from Eldridge.

19. Divina Capital

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5-year search growth: 133%

Search growth status: Regular

Year founded: 2020

Location: Amsterdam, The Netherlands

Funding: $173K (Seed)

What they do: As a collective investment fund, Divina Capital offers hedge fund investment opportunities for individuals and corporations. Their offerings are designed for institutional investors, corporations, and customers who need independent asset managers. The fund offers various participation classes depending on how much a customer wants to invest.

Conclusion

That concludes our list of the top hedge fund startups going strong in 2021.

The advent of AI and machine learning has paved the way for unique early-stage hedge fund startups. Furthermore, with blockchain technology and cryptocurrencies taking off, we’re beginning to see diverse startups in the industry.

As new investment opportunities and asset classes develop, the hedge fund industry should continue to adapt, leading to unique hedge fund startups.

Written By
Josh Howarth
Co-founder of Exploding Topics.
548 Market St. Suite 95149
San Francisco, California
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