As the London fintech world bids goodbye to investing app Nutmeg, a new spice-themed alternative is about to rise up from the ashes.
Investing startup Clove, a new venture from serial entrepreneur Christian Owens, has emerged from stealth after landing a bumper £10m funding round.
The pre-seed round featured a host of prominent investors including Cleo founder Barney Hussey-Yeo and former chief financial officer at Google, Patrick Pichette.
The round was led by private equity firm Accel.
The company said it plans to use the funding to build its platform and team of advisers, with the goal of completing a full launch in 2026, once authorisation from the Financial Conduct Authority has been approved.
Owens, who previously ran payment firm Paddle before ultimately quitting the company, noted that the pool of investors were drawn to the company through its plans to make financial advice more accessible and less expensive.
“It was an interesting fundraising process, because everyone we spoke to whether they were founders of businesses, investors…they [said] at some point in my life I felt this problem,” Owens told City AM.
“I can go and try and get advice, but it feels inaccessible.”
The financial advice gap has grown significantly larger in recent years with more Brits, particularly young people, calling for more attainable advice in order to improve their finances.
The lack of affordable advice has left many turning to unregulated sources, including ‘finfluencers’ and chatbots which are unable to tailor advice specifically to people’s financial needs, putting them at risk of losing their money.
It comes at a time where Chancellor Rachel Reeves is pushing for an increase in retail investment in a bid to boost economic growth and revitalise the stock market.
AI and traditional models
Clove aims to bridge the gap through tapping into AI tools, however Owens stressed that customers would not be clashing with AI bots when trying to gather advice.
He said: “Our approach to AI hasn’t been, let’s figure out how to make a great chat bot that you can talk to about your money.
“It’s been how do we enable the advisers…instead of them being able to serve 50 clients a year, how do we enable them to serve 250 clients a year?”
Clove’s AI tools will be focused on “reducing the amount of work” that an adviser faces when meeting with a client, by dealing with “paperwork and compliance” as well as operating spreadsheets.
Clove is also stepping into the market during a pivotal time for the financial advice sector, as more clients move away from traditional models, which are facing mounting competition from digital rivals who offer a more simplistic process that meets client expectations.
Legacy firm Hargreaves Lansdown continues to slide further out of view following its private equity takeover.
Meanwhile, global bank JP Morgan Chase scrapped its personal investing platform Nutmeg, in favour of creating a unified investment service, dubbed JP Morgan Investing, which plans to offer digital tools to keep pace with competition.
Digital only platform Robinhood is also beginning to take up more market space, with Clove prepared to do so as well.
Owens added: “The vast majority of people in the UK are woefully underserved, and it’s historically been this sort of issue of the structure and economics of large legacy firms.
“We’re aiming to change that.”
Beyond the UK
While Owens and co-founder Alex Loizou are keeping their initial focus on UK based clientele, both are keen to eventually tap into new markets, expanding both their client base and Clove’s offerings.
Owens said: “We definitely have ambitions over several years to do it in other countries as well.”
He added that Clove aims to offer investing, saving and pension advice for all demographics, and as their clients’ finances grow and become more complex, the platform can grow alongside them to “service those needs”.