DarcMatter Aims To Shed Light On Alternative Investment Opportunities

Mar 13 2015 | 2:07pm ET

Fintech firm DarcMatter may have a mysterious sounding name, but the firm aims to demystify the process of investing in alternative assets. The New York-based company is using technology to allow qualified individual investors to access institutional quality funds.

Company: DarcMatter
Location: New York City
Website: www.darcmatter.com
Sector: Retail Investment, Institutional Investment
Year formed: 2014
No. of Employees: 10
Stage: Seed
Notable investors: Our angel investors are various financial professionals from Blackrock, Guggenheim Partners, Societe Generale, BTG Pactual, and Houlihan Lokey.

Pitch: DarcMatter is an online investment platform that provides transparent, institutional-level access to alternative investment opportunities.

Tell us a bit about your company and what it does?

DarcMatter is a fully transactional platform that provides transparent, institutional-level access to alternative investment opportunities. Family offices, wealth managers, and individual accredited investors use DarcMatter to source private investment opportunities in hedge funds, private equity, venture capital, and fixed income products. By utilizing technology and designed feeder funds, DarcMatter is able to provide a frictionless process for both investors and private issuers while remaining fully compliant of all current financial regulations.

How is DarcMatter different than other companies in the same space?

There are various indirect competitors operating in the space today, including websites emphasizing professional networks and online platforms with specific product, industry, or institutional focuses. What makes DarcMatter unique is that we offer pre-vetted, open access to alternative investment opportunities across a wide range of industries and asset classes. Additionally, we create and manage feeder funds that allow individual accredited investors to access investment opportunities on an institutional level by lowering buying minimums. By acting as a single investor in an investment opportunity and disseminating information updates and profits back to investors, our feeder funds considerably streamline capital raising logistics, capital calls for pooled funds, and post-closing investor management.

What is your revenue model? How will the company make money?

DarcMatter charges a basic monthly subscription fee of $2,500 for issuers who are listed on the platform. Our designed feeder funds have associated administrative and processing fees.

Who is your target market? How big is the opportunity?

Our target market consists of both accredited and institutional investors that are seeking illiquid alternative investments. According to a recent study conducted by Cerulli Associates, U.S. household investable assets amount to $33.5 trillion. Conservatively estimating that 5% of these investable assets are allocated to alternative investments represents a $1.67 trillion market opportunity. 

Why are you and your team capable of succeeding?

Our executive team possesses the relevant expertise to provide DarcMatter with a significant advantage in developing the technology back-end infrastructure, marketing, and extensive securities regulation knowledge required to provide our unique feeder structuring. Sang H. Lee, CEO and founder, has significant experience in the private placement / investment banking realm, while our CTO, Stan Solodkyy, has over 10+ years of computer development and software experience working in financial integration. Natasha Bansgopaul, DarcMatter’s CMO, has both offline and online marketing expertise working at a Fortune 50 company. Furthermore, our advisors and investors are extremely helpful with connecting us with the right people.

What is your company’s next target/milestone?

The DarcMatter platform currently features over $100M in live deal flow through Feeder structures and standalone venture capital and hedge fund offerings. We have signed LOIs with leading issuers within the VC, hedge fund, and commodity trading industries who have agreed to provide DarcMatter with primary allocations in their respective funds. We are also in the process of formalizing a partnership with an organization that represents approximately 60 family offices with an average AUM of $1 billion each. Our goal is to eventually roll out analytics and portfolio optimization tools inclusive of alternative assets and data collected through the platform.

Can you tell us one unusual fact about your company?

Our company name “DarcMatter” is inspired by the physics concept, dark matter. Dark matter is a hypothetical type of undetectable matter that comprises most of the universe and governs much of the physics we see today. We believe the alternative investment industry is similar, as it is a driving force behind the financial markets but is plagued by opacity and informational inefficiencies. DarcMatter ultimately hopes to bring transparency to the private capital markets.

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