With AI as its super power, Arta Finance wants to take high value investment to the masses

Why should the privilege of a family office that manages and grows wealth be limited to those who are already wealthy? This seems to be the problem the team at Arta Finance wants to solve, but for millions of people leveraging artificial intelligence and machine learning.

The Arta Finance digital family office is now available to accredited investors in the United States, but will soon open up to other markets too, including India. In stealth mode for over a year, the company has already raised more than $90 million from Sequoia Capital India, Ribbit Capital, Coatue, and more than 140 tech and finance luminaries, including Betsy Cohen, Eric Schmidt and Ram Shriram. It helps that the eight founders are mostly from Google and top finance companies with experience in having built products like Google Pay, Google Finance, Gmail, Chromebooks, and the Amex Black Card.

“Over the last few years, we realised that AI and machine learning had progressed enough that we could actually start doing something about it at scale. And so we started digging into what these family offices were and realised most of it we could automate in a fairly straightforward way,” explains CEO and Co-Founder Caesar Sengupta, the man credited with having built and grown Google Pay to a 175 million user base in just five years.

Arta Finance’s CEO and Co-Founder Caesar Sengupta

Sengupta wants to cater to professionals in the 30 to 40 age group who “have saved up some money, but not yet enough to have like private banks or family offices help them”. “We figured what we could do was use technology to sort of make the same advantages available to millions more by creating a digital family office,” he says.

They will also bring down the entry barrier for a product like this with a minimum threshold of $10,000 for the US. “We feel these kinds of wealth generation, wealth preservation, wealth protection capabilities should be available to all.” Arta will have a fee-based model for its investors. High net worth families keep family offices, or a privately held company that handles their investments and wealth, usually upwards of $50 million, to grow and pass on to coming generations.

Using a digital front end, Arta Finance will start off by giving access to private assets like private equity, real estate and private credit. “Obviously, we will make it much easier to do, much simpler to understand.”

Sengupta also wants to unleash the power of credit, which he believes is a “superpower” of the ultra wealthy. “They will never sell their assets, they’ll actually borrow against it and go against it. The rest of us will, you know, often have to liquidate our assets every time we need it, like when we put a down payment down on our house,” says Sengupta, adding that Arta will open up a line of credit against assets so that tech professionals for instance don’t have to sell their stocks to grow.

But Arta’s USP will be using AI at scale to create public market portfolios, bringing in quant fund learnings but without the PhDs usually needed to run them. “They are using scientific algorithms, a lot of data to invest their money. That’s a space that is perfectly set up for AI and machine learning because it’s a big data problem,” he says, adding that a bunch of his colleagues and one of Arta’s co-founders come from that world. Arta Finance now has 67 employees with offices in Mountain View, California and Singapore.

Merging the knowledge from the world of high value finance with the deep AI understanding the team has from Google, Sengupta says, enables Arta to bring “AI-managed portfolios” to millions of people by creating a highly personalised, super easy and super sophisticated, but low-cost portfolio. “We are calling AI managed portfolios, amps. And that’s the core of where we’re starting.”

On top of this, Arta is building a user experience that connects investors to experts who can help with taxes and other stuff. “Over time, we will start trying to bring more of the financial ecosystem that can help each of our rising professionals, and hopefully over time everyone into that space.”

Sengupta says while the global waiting list will be launched November 2, they will only be able to onboard accredited US investors initially. “We are applying for approvals and licences in multiple countries and obviously India is a very high priority for us, given our backgrounds.” But Sengupta adds that Indian investors should be able to use the RBI’s Liberalised Remittance Scheme (LRS) to invest via Arta even before local operations start.

With BNY Mellon as the custodian bank, Arta will be investing primarily in the US market because it gives access to the global markets and also tends to have the most amount of free available data for the AI to use. Sengupta says the personalisation aspect of Arta lets users make market-appropriate adjustments for themselves. “So someone in India can actually say I have a house in India, I work in India and so I actually want lower India exposure.” But there is AutoPilot too, which will let the AI take full control with the user just giving some basic guidance on the investment.

One aspect Arta is banking on, is how the younger generation now is a lot more similar globally. “That’s another key aspect of this. The world actually has gone mobile first. And the youth are similar, and that’s actually helping us a lot.”

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