Sidekick, a startup which seeks to unlock the financial advantages of the ultra-wealthy, has raised £4.5 million in a seed round and £4m via a debt facility.
The funds will see the startup continue scaling its team and expanding its product lineup while securing a European licence.
The seed round was co-led by Pact VC and TheVentureCity and supported by MS&AD, Blackwood, and 1818, alongside previous investors Octopus Ventures, Seedcamp, and Semantic Ventures. Columbia Lake Partners, backers of Mews, Factorial, Griffin, and Contentsquare, provided the debt financing.
According to a report issued by the Resolution Foundation, households in higher wealth deciles can proportionally hold much more of their money in higher-returning assets, exacerbating an ever-increasing wealth divide.
Part of this is due to differing liquidity requirements (for instance, lower-income households often hold more cash to protect against unexpected expenses). Still, a compounding factor is a lack of access to some of the higher-returns assets (for instance, alternatives) and a lack of expertise to explain and help navigate them.
Beyond the reach of retail investors, such services have traditionally been reserved for the ultra-wealthy.
Sidekick is a financial services provider for investors who have graduated beyond dabbling in stock picking and robo-advisory and are actively seeking solutions to grow their wealth more meaningfully. It targets founders, tech workers, lawyers and other hard-working professionals who know they should be doing more with their money but are uncertain of the next step and distrustful of traditional financial advisors who often don’t understand their situation.
“We’re looking to address the growing inequity of wealth creation and let the money of hard-working entrepreneurs and professionals work harder,” said Matthew Ford, co-founder and CEO.
“With over a million people in our target demographic in the UK seeking support for their financial goals, the demand for innovative wealth management solutions tailored to their unique needs is undeniable.
“Sidekick exists to ensure that it’s not just the ultra-wealthy that have access to the tools and products needed to secure long-term financial prosperity.”
Sidekick obtained a comprehensive set of regulatory permissions from the Financial Conduct Authority (FCA) and launched its actively managed flagship equities product in January.
Offering a low minimum portfolio requirement of just £1,000, investors receive a premium product set and service, including expertly managed investments, regular portfolio updates, insights into market trends, and broader investment themes, typically reserved for a £500,000 to £1 million and upwards portfolio.
Expanding its product lineup, Sidekick is the only wealth management service of its type in the UK to offer a portfolio line of credit, a lombard lending product designed to help investors stay invested over the long term while still having access to liquidity when needed.
Ford added: “This product has typically been reserved for those with multi-million-pound portfolios and only offered by private banks. Launching this product to a wider client base demonstrates that we can deliver our promise to provide the same financial services once traditionally reserved for the select few.”
Investors can borrow up to 40% of the value of their portfolio, subject to assessment, without needing to bear the brunt of a forced sale. The credit facility is backed by the investor’s portfolio, which helps Sidekick provide larger loan amounts, lower fees and greater flexibility. The product is designed to enable more long term investment horizons; it can’t be used for investing.
Monik Pham, founding partner at Pact VC, commented: “Sidekick addresses wealth disparity and the limited options in the market, which often restrict investors to extreme ends of the spectrum: solely passive investing or active speculating.
“By catering to an underserved segment with innovative financial products and inclusive wealth-creation opportunities, Sidekick is changing private wealth for the new generation.”