After launching its corporate venture arm late last year, First Rate has made its second investment from its $25 million fund.
First Rate Ventures, formed by the Arlington-based wealth management solutions-focused fintech firm, announced making its first investment in the regulatory technology space, leading a seed round for New York’s RegAlytics, a regulatory data analytics company.
“First Rate Ventures is ultimately about investing in innovative firms that share our mission to help promote stewardship and growth,” said Marshall Smith, First Rate Ventures managing director, in a statement at the time of its launch.
Funding and a strategic partnership
While the terms of the deal were not disclosed, First Rate Ventures has previously said it aims to lead seed-stage rounds with investments ranging between $500,000 and $2.5 million in post-revenue companies that have up to $1 million in annually occurring revenue. It typically targets spaces like artificial intelligence, blockchain, and ESG within the larger financial technology industry across North America, Europe, and Asia.
RegAlytics Founder and CEO Mary Kopczynski said the deal comes with a “strategic partnership.” In addition to financial investments, First Rate Ventures helps scale portfolio companies through access to First Rate’s technology assets and network of more than 500 banks and wealth management firms, which it says have more than $2.4 trillion in collective assets. First Rate has more than 100 employees across its North Texas and Hong Kong offices.
“In addition to providing capital, the award-winning First Rate ArtIE technology platform will be utilized to transform and expedite the platform delivery and support to RegAlytics, offering rapid expansion to cover regulations in additional sectors,” Smith said in a statement.
Second investment in about three months
RegAlytics is a provider of regulatory data, vetted by the company’s team of experts, that’s able to be managed by individuals or other governance, risk, and compliance businesses. It was launched in 2019 as a spinoff from Kopczynski’s previous regulation tech-focused consultancy firm 8of9, which was acquired by fellow New York fintech consulting firm Prospect 33 last year for an undisclosed amount.
The investment in RegAlytics marks the second for First Rate Ventures since it launched in December. At the time, it announced leading a $2.3 million seed round for Arlington-based investment management research provider Integrated Capital Research Partners. ICRP was founded by former First Rate account executive Bob Mehringer and recently acquired investment model management platform MMxChange from Pennsylvania-based advisory solutions firm InvestEdge.
Helping drive First Rate Ventures is strategic advisor Prabhakar Reddy, who has more than two decades of experience in the fintech and venture capital space. A former CEO of Irving IT consulting services provider Motivity Labs and operating partner and board member for local AI health care platform FelixHealthcare.AI, Reddy is also the co-founder and managing partner at early-stage VC firm Dallas Venture Partners, which rebranded from Naya Ventures in 2020.
“We will aim to deploy capital in a redeemed fashion, focusing on not only the entrepreneur but also the community they do business in and investors,” Smith said.
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