Rebecca Lynn kept her 'RIA' powder dry since booking big 2015 gain on FutureAdvisor but now she's leading Savvy round with high hopes of applying AI to RIAs

Rebecca Lynn is back after scoring a rare financial success in automated advice – but this time she's investing in a human RIA that wants to apply AI to spare RIAs from management headaches.

The co-founder and general partner of Canvas Ventures is leading a $15.5-million, third raise for Savvy Wealth, which is being classified as an “A” raise, “part B.”

Savvy is trying to be an automation engine for RIAs – with artificial intelligence as a potential afterburner, Lynn explains.

"I’ve been waiting to see a company like Savvy Wealth, where AI technology minimizes operational overhead for investment advisors, who are weighed down by archaic processes and mountains of administrative work,” she says in a release.

“So many of these tech companies have wanted to take the financial advisor out of the picture. I always thought that was just wrong,” Lynn added in a Fortune interview.

Poaching battle

No question that advisors are the main course at Savvy as it recruits aggressively and braves legal sword brandishing along the way. See: Why Savvy Wealth is calling an $80-million LPL poach 'monumental'.

Savvy also just acknowledged on-the-record the hire of yet another advisor, Brad Morgan, from Mariner Wealth Advisors, despite the two firms' ongoing legal battle. 

At issue are three advisors who allegedly breached their contracts when they left the Overland Park, Kan., mega-RIA for the NYC start-up.

Morgan is named as a defendant in the suit, which alleges that he poached at least $60 million from Mariner. See: Mariner sues Savvy for poaching.

Savvy CEO Ritik Malhotra says via email he is trying to do justice to these advisors by doubling down on an uber-tech approach to wealth management.

"As Savvy continues to add financial advisors to the team, and we continue to hone the product around their needs, we see now as an opportune time to double down on our strategy. This is ultimately why we decided to raise the second tranche of our Series A round,” he explains.

No blue ocean

Founded in 2021, Savvy now employs 30 advisors with $700 million under collective management, up from its tally of 24 advisors and $600 million just two months ago. In January, it employed just 12 advisors.

Yet Savvy needs to keep sprinting because it may hear footsteps from other software-charged RIA startups, sources say.

Fellow travelers include predecessors like Facet Wealth and Farther. 

Both are fierce competitors, even at the lower end of the market, according to Andrew Besheer, principal of consultancy, Besheer & Associates.

“[There's] a whole slew of small – often currently still sub-scale – start-ups looking to [equip advisors with] AI-enabled advisor assistants,” he explains, via email.

"Savvy appears to be among the better capitalized, with experienced management and a captive market starting out, so they’re reasonably well positioned; however, it definitely isn’t blue ocean.

“Without even trying to jog my brain, I can think of at least four other firms looking to do exactly the same thing, and probably there’s at least half a dozen others,” he says.

Standalone future?

Besheer also sees a potential win for Savvy, should it decide to sell its technology on a standalone basis.

"An SaaS business around the tech … would be really interesting. There’s a huge opportunity for AI co-pilots to enhance advisor productivity. It's very much a trend that’s more than just hype,” he adds.

Malhotra says Savvy has no plans to outsource its software, stating that his firm's "success in establishing a robust business that attracts new advisors stems from our focus on creating an enticing product and business model.

“The best path forward when it comes to both the advisor and client experience is to provide a vertically-integrated solution to financial advisors and not just sell the software as a standalone solution,” he explains.

Fanatical investors

Savvy raised $11 million in a Nov. 2022, A-1 raise and $7 million in a Feb. 2022 seed round, and including its latest raise, it has brought in $33 million in all.

Canvas, based in Portola Valley, Calif., has previously backed biking app, Strava; data integrator Mulesoft; and robo-advisor FutureAdvisor. 

In 2015, BlackRock paid a [then] staggering $150 million for FutureAdvisor – and not even for its cash flow. 

BlackRock's plan was to turn it into a robo-advisor that could be used by RIAs to handle a book of mass market accounts that exist way below the firm's minimums. See: BlackRock may build the biggest, baddest RIA platform yet as 'Boy Wonder' begins 'Aladdin-izing' FutureAdvisor

BlackRock's acquisition apparently flopped and what was left of it became a side venture for Josh Brown and Barry Ritholtz. See: At T3 event Josh Brown explained how his RIA, Ritholtz, got FutureAdvisor -- and hundreds of millions of AUM -- from BlackRock, along with a daunting software puzzle

Prior investors in Savvy include: Thrive Capital, Brewer Lane Ventures, Index Ventures, and the House Fund also reupped their investments, with Alumni Ventures the sole new name investor. See: Savvy raises fresh $11 million from VC backers.

But none claim their specialty in the same fanatical words as Lynn's firm:

 'We are fanatic about Series A and B companies,' the Canvas website crows.