New Zealand funds management software startup Caruso has raised A$3 million in Seed funding as it looks to cross the ditch as establish an Australian office.
The round was led by Kiwi VC Icehouse Ventures, with support from GD1, Chris Heaslip, founder of Pushpay, and the Rae family of Gull Oil.
Caruso plans to add sales and marketing capacity, speed up new feature releases, and open an Australian office.
Cofounded this year by Mark Hurley and Oliver Shaw, the fintech is already being used a number of leading fund management businesses with more than $5.2 billion in assets under management (AUM).
Hurley, the co-CEO, said didn’t set out to develop a SaaS (software-as-a-service) business, but it quickly became clear that they’d built a product that solved a real problem for fund managers, with an additional $36 billion in AUM in the pipeline in their first six months since launch.
“Caruso was originally just meant to streamline operations inside our own fund management business, but very quickly we had other fund managers enquiring about our software and how they might be able to license it for their own businesses,” he said.
“By the end of 2022, that noise became too loud to ignore, so we did some research and found an unaddressed problem we were perfectly positioned to solve, in a very large and growing market.”
Hurley said the operational efficiency Caruso delivers allows fund managers to reduce costs while delivering improved value to investors.
“We believe that the effort to maintain, understand and update investor data across multiple siloed systems is secretly the cause of almost all the administrative work of managing a fund,” he said.
“And the problem is industry-wide, across fund managers of all types and sizes. We’re helping fund managers break free from expensive, clunky, legacy systems and empowering them with modern tools to help them and their investors thrive.”
Icehouse Ventures partner Jack McQuire, said the investment industry has been “in sore need” of a technology overhaul.
“It would hardly inspire confidence for many investors if they were to take a peek behind the curtain at the kind of tech the majority of fund managers are using,” she said.
“Speak to most early Xero team members and they’ll tell you that their competition wasn’t other accounting platforms, it was Excel spreadsheets. We truly believe that the investment community will reflect on our history as BC and AC; before and after Caruso.”