Motif-investing

Chinese internet company Renren (NYSE: RENN) has led a US$40 million investment in Motif Investing, a U.S. upstart online broke claiming to pioneer concept-driven investing for individuals and financial advisors. The funding takes Motif’s total capital raised to over US$120 million, with previous funding rounds from JPMorgan Chase, Foundation Capital, Goldman Sachs, Ignition Partners, and Norwest Venture Partners, and others.

Renren founder Joseph Chen will join Motif’s board of directors along with Carl Stern, former vice chairman of the Investment Banking division at Goldman Sachs and former chairman and CEO at the Boston Consulting Group.

Co-founded by former Microsoft exec Hardeep Walia, Motif Investing is a low-cost online broker that lets users invest in the world of big ideas. It allows investors to trade “motifs” – intelligently-weighted baskets of stocks and bonds built around themes, investing styles or multi-asset models – in single transactions for low fees. The platform has now registered nearly 120,000 users and monetizes the service by charging US$10 per stock portfolio.

The new funding is expected to fuel Motif’s expansion into tools for wealth managers and other financial advisors. The San Mateo, California-based startup plans to expand into U.K and Hong Kong markets this year, while cooperation with Renren is expected to facilitate its expansion into mainland China.

Started as a social networking platform for college students, Renren has branched into other areas upon failing to generate profits from core services; moreover, its existing profitable sectors, like online gaming, also started to decline in late 2013. The company has therefore shifted away from advertising and ought new revenue sources to monetize its huge college student user base via student loans, credit cards and online financial businesses.

Joseph Chen has disclosed that Renren is planning to invest approximately US$500 million in fintech startups. Thus far, the company has invested in companies such as real estate crowdfunding site Fundrise, student loan consolidation and refinancing platform Social Finance, and financial social media Snowball.

 

Editing by Mike Cormack (@bucketoftongues)