Yodlee schools RIA tech startups at The Vault and RIABiz stops by
Hedgeable and Totum were among attendees at the San Francisco brain-in where Yodlee exposes its API and lends its experience
6 min read- Yodlee's incubator, Ynext, targets data-hungry startups in the RIA and investor markets.
- Envestnet's future success may hinge on Yodlee's data capabilities.
- Ynext offers startups access to Yodlee's platform, mentorship, and funding.
- Startups gain insights on approaching institutions and user experience design.
Brooke’s Note: I’m the first to admit that I’m a little too chained to my desk here in Mill Valley. But I’m determined to attend to things that will open my eyes, hence those of our readers, when they happen locally and represent a side of RIA business life that I don’t know much about. A good example was when I heard that Envestnet Inc., through its recently acquired Yodlee subsidiary, was holding a very sweet little Silicon Valley incubation event at a hip, if windowless, workspace, in downtown San Francisco. I knew of two of the eight companies attending. One was Totum Wealth, which is headed by the dynamic Min Zhang. See: Why the U.S. should follow China in issuing 50-year bonds. I had never met Zhang. The other was Hedgeable, a New York-based robo-advisor that lives on the same block as Betterment, but which takes a different, lower profile. approach to success — and its owners, Mike and Matt Kane, who are twin brothers. Two companies that made out quite well in life as big Yodlee data users include FutureAdvisor and Learnvest.
If Envestnet is as big and successful as an outsourcer in the world of independent financial advisors in 2026 as it is in 2016, much may rely on its purchase of Yodlee, a very Silicon Valley data supplier, data sharer and data analyzer.
But of course, data companies are springing up in the RIA business and beyond as companies like ByAllAccounts get reenergized by big buyers like Morningstar Inc.. Companies like Addepar Inc. that call themselves advisor software companies are really all about the data. Then there are the data start-ups like Quovo.
To get its hooks into the next generation of data-hungry online firms who are targeting the advisor and investor markets, Yodlee runs Ynext Incubator.
Golden ticket
Though Yodlee spokespeople declined to comment for this article, they sent along this blurb that also resides on the program’s website:
A long-form explanation of why -- Wall Street be damned -- Envestnet's purchase of Yodlee might make sense
“Ynext is a six-month program for developers, innovators, and entrepreneurs to launch disruptive products that leverage transactional financial data. Admission to the program is highly selective and participants are expected to push hard on all elements of their business, from concept to completed product.
"The Incubator features: 12 months of access to the Yodlee platform, A development team to help simplify and manage the API integration, guidance from mentors and industry experts, invitations to industry events that drive awareness. Participation in three to four Silicon Valley boot camps, Cash to kickstart your company. Assistance from Yodlee’s team, partners, and customers.”
The blurb goes on to say there are no fees due upon acceptance to the program and that participants get to present their product to investors, partners and influencers on Demo Day. participants say they learned they were selected back in November.
The Yodlee program is run by Jeff Cain, whose credentials include a BA in economics from Stanford University and an MA in religion from Harvard University.
He declined to respond to my overtures through LinkedIn.
Story Timeline
Twin founders
Why FutureAdvisor orphaned its B2C book of business, how post-Invesco Jemstep is doing and other learnings at CFA Society's robo-panel in San Francisco
Part of the religion that startups could learn at the event: hit many cylinders of good business and good engineering like how to approach large institutions, how to gear user experiences to real users and difficult questions for chief technology officers.
When I came in at the end of the day’s activities to The Vault, there was a big, largely untouched, buffet of delicious looking food and a number of giant cookies strewn about that had been half-nibbled. Participants seemed a little overstimulated, if hypoglycemic, but were eager to say they had learned plenty. It was all too tempting to my dog, Shadow, who had to be tethered in the lobby.
Matt and Mike Kane, the twin brothers who are the founders of Hedgeable in 2009, caught me up on the last seven years. Perhaps most impressive is that they are a robo-advisor that is nearing break-even, largely by keeping headcount ultra-lean at just eight people.
The Kanes emphasized to me that they actually see the firms smaller size as an advantage because they are able to maintain a “startup culture.” They argue that competitors like Wealthfront Inc. and Betterment Inc. not be considered startups because they are not only funded by big VC firms but also living on the pins and needles of knowing that they will need to procure additional mega-rounds of capital to maintain their relatively high overheads. Hedgeable is not a robo in the sense that its fees are more in line with classic RIAs and its investing arsenal is, too.
Adjusted vision
Min Zhang, founder of Totum Wealth, was also effusive in her praise of the Yodlee program. We sat down to catch up on her firm’s progress as the larger crowd began to assemble to head toward a restaurant for dinner. See: With algorithms and awkward questions, an ex-PIMCO 32-year-old crashes the RIA business
Zhang allows that her firm is so new that it is still adjusting its vision as it goes along. For example, though the firm started with the intention of selling the kinds of data analytics that a PIMCO uses in building portfolios, it is finding RIAs who are saying they’d prefer her to move up the food chain and literally provide the portfolios themselves.
“It seems advisors don’t want us to stop there; the want us to provide solutions. And I think they’re right.”
Zhang, 32, adds that an exceedingly nascent RIA business in China also beckons her. Zhang was raised in China and may be in a particularly good position to bridge divides. Why the U.S. should follow China in issuing 50-year bonds.
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