Investing in DriveWealth | How to Buy Pre-IPO Shares

DriveWealth operates as an app-centric, B2B Fintech platform. The company has been instrumental in driving the adoption of mobile trading via its suite of products designed to streamline the integration of these features into existing protocols. Today, DriveWealth’s cloud-based API investing options power some of the leading apps in the market, and its products continue to help democratize the economy via flexible and intuitive features.

All of these factors have helped DriveWealth secure a leading position as a B2B financial service provider. They also continue to drive interest from investors in both the institutional and private sectors. However, DriveWealth is privately owned. The only way to gain access to the company’s shares is via secondary markets. Here’s what you need to know to gain access to DriveWealth Pre-IPO shares.

What is DriveWealth?

New York-based Drivewealth entered the market in 2012. Its founder, Robert Cortright, realized that there was a gap in the market in terms of trading services and app providers. He saw the potential of filling this niche with a B2B protocol provider that offers flexible, regulated, and streamlined services.

This business model proved successful, directly tying DriveWealth to some of the most popular brands in mobile finance. Through innovative digital investment services, DriveWealth provides app clients access to a variety of assets, including US equities, mutual funds, ETFs, fixed income solutions, and stock options.

Brokerage-as-a-Service

DriveWealth was the first to offer fractional share investing to the mobile market via its suite of digital investment services. The Brokerage as a Service approach allowed businesses to tailor their requirements to fit their budget and system needs. This strategy quickly gained popularity with digital wallet providers, brokers, asset managers, and consumer app developers.

Source – DriveWealth

DriveWealth’s focus on cloud-based API-embedded investing solutions has proven to be a valuable resource in the market. This flexible toolkit offers flexibility, extendability, and security from a recognized platform. It enables these companies to provide cutting-edge digital financial services like fractional trading of stocks, US equities, mutual funds, ETFs, and more.

Dollar-based Trading System

One of the biggest draws to DriveWealth is its dollar-based trading layout. This approach makes it easier for users to understand their investments and begin leveraging the platform’s helpful features. Notably, DriveWealth’s patented approach to trading opens the door for more investors to participate in the economy.

Additionally, there are a multitude of tools that simplify the investment process and provide optimal flexibility. For example, the API supports integration of fractional equities trading, an autopilot portfolio management tool, and spare change products. The latter feature automatically rounds up on purchases and invests the change for users, making saving a thoughtless and daily action.

Historical Funding Rounds

Summary of DriveWealth Funding:

Total Funding: DriveWealth secured $542M across 6 funding rounds

Largest Round: DriveWealth’s largest funding round secured $450M in August 2021.

Investors: A total of 21 institutional investors back DriveWealth

Latest Round: The latest funding round raised  $131M and was a Series D round held in August 2021.

Funding Rounds Breakdown:

• 1 Seed
• 3 Early-Stage
• 2 Late-Stage

Key Investors:

DriveWealth secured funding from several institutional investors, including Insight Partners, Accel, Greyhound Capital Management, SoftBank Vision Fund, Point72 Ventures, FTX, Base10 Partners, eBook Architects, Citi Ventures, Mouro Capital, Fidelity International Strategic Ventures, SBI Investment, Raptor Group, Route 66 Ventures, and SenaHill Partners.

Why Invest in DriveWealth?

There are several reasons why someone might want to invest with DriveWealth. For one, it provides wealth managers, banks, broker-dealers, asset managers, and consumer brands with a plethora of new ways to improve their clients’ user experience. Additionally, it remains a pioneering force in the market as the first to combine fractional trading and embedded finance.

The system’s flexibility enables businesses to tailor their offerings to suit their specific model. Companies can provide support for a wide array of financial offerings, including stocks, automated saving features, +6,000 global mutual funds, +3,000 ETFs, and more.

US Licensed and Registered

DriveWealth operates as a fully licensed carrying and self-clearing broker in the US. It can offer its services to all 50 states and is licensed to work directly with banks, financial advisors, consultants, and service providers. Additionally, the company has licensing in several nations across the globe, enabling it to provide real-time access to a suite of financial tools designed to drive client engagement and increased ROIs.

DriveWealth Has a Growing Community

The DriveWealth ecosystem continues to expand. The company has strategic partnerships with leading financial service providers, including Xapo Bank, Revolut, Cash App, MoneyLion, Chipper Cash, and many more.

Easy Integration

One of its main draws is the ease of integration. Every aspect of the system was designed to support quick and seamless adoption by client users. The intuitive interface can be customized to fit your business design, style, and layout. Businesses can select what features to offer users, including lending options, portfolio rebalancing, automated dividend reinvestment, and more.

Inclusive Products

Another reason why DriveWealth continues to shine is its business model. The company supports a full cycle of products that begins with simple onboarding, ensuring that everyone can operate and navigate the products. From there, the developers focused on making account funding streamlined and integrating the API straightforward. Users can easily operate features like trading options and creating digital statements. Also, the products support tax reporting.

This all-inclusive business model ensures that DriveWealth offers a product line to match nearly every financial application’s needs. These options include institutional trading capabilities such as order routing, clearing, custody, stock loan, enhanced liquidity, and NYSE Floor execution.

DriveWealth has an Expert Team.

DriveWealth has brought together experts from across the financial and digital sectors to support their vision of democratizing investing. The company currently employs +300 personnel and works closely with FINRA regulators, PhDs, and technology innovators. This approach ensures their products remain cutting-edge and useful.

Funding and Investor data sourced from Tracxn

1. Pre-IPO Secondary Marketplace

Secondary markets are purpose-built exchanges that connect pre-IPO shareholders with potential investors. These marketplaces can offer these assets because they work closely with employees, early-stage investors, and venture capitalists, who are crucial to the company’s pre-IPO growth.

Investing in pre-IPO shares of DriveWealth could offer strong returns if the company’s valuation increases following its IPO. It’s common for company valuations to increase following an IPO. As such, it makes sense to add pre-IPO shares to your portfolio before the firm announces plans to go public.

Secondary marketplaces have many requirements. Here are some concerns you should be made aware of:

Eligibility: This approach requires you to be an accredited investor, meaning you will have to show at least $1M in liquid assets to qualify for access.

2. Private Equity Firms

Private equity firms gain access to pre-IPO shares during investment rounds. They then offer these shares to high-net-worth accredited investors with a commission. Notably, private equity firms are known to have extra stipulations, including blocking the sale of shares for years in some cases.

3. Employee Equity Sales

Many consider employee equity sales as the best way to acquire pre-IPO shares in DriveWealth. This method of acquiring pre-IPO shares requires you to connect with former employees. It’s common for companies to issue shares as part of an incentive package. Notably, this profit-sharing method has become more popular, leading to more pre-IPO share opportunities for investors.

Private Transactions: There are a lot of hoops you will need to jump through to complete a private pre-IPO transaction, including creating specific legal agreements, conducting valuations, and setting in place any limitations on the transfer of the asset.

Brokerage: Brokers will take a lot of the confusion out of the pre-IPO process. These professionals can guide you through each step, ensuring full compliance and avoiding common errors untrained professionals make.

There are several risks that you should consider before jumping into the pre-IPO shares investment arena. Here are the top concerns:

Liquidity Risk

If you are looking for an asset that you can sell right away, pre-IPO shares are not the best option.

These investments can include sales and transfer clauses that prevent the transfer of the asset until certain criteria, such as the IPO’s completion, are met. It’s even common for pre-IPO shares to require you to wait years before gaining the ability to sell your assets.

Finding a Broker

If you meet the requirements and are comfortable with the risks, several platforms offer access to pre-IPO opportunities:

Important: Always perform thorough due diligence and consult a financial advisor before investing in private company shares.

Valuation of DriveWealth and Future IPO

DriveWealth secured a valuation of $2.85B on Aug 23, 2021. The company earned Unicorn status after gaining support from 21 high-level institutional investors and securing strategic partnerships with industry leaders. Today, it fills a valuable niche in the market, streamlining access to next-gen mobile financial tools designed to drive results.

Through its high-level B2B Partnerships, DriveWealth gains instant access to massive user communities. Unlike competitors, it doesn’t have to invest heavily into enticing new clients – its reputation and track record do the work for it. Today, it’s recognized as a top API-based financial services technology platform.

DriveWealth shareholders could see strong upside potential if the company continues on its trajectory. All indications support a drive towards mobile and digital banking services in the future. As such, DriveWealth’s positioning could push future IPO aspirations.

Notably, if DriveWealth were to announce plans to go public, it would see immediate support from the public sector. Given its positioning in the financial sector, there’s good reason to believe the event could be one of the largest FinTech IPO events in recent years.

DriveWealth Conclusion

DriveWealth could see much more success as the economy goes digital and more people drop traditional banking in favor of mobile options. Those holding pre-IPO DriveWelth shares hope to see massive gains if and when the company announces plans to go public.

It’s recommended that you consult a financial expert before making any pre-IPO share investments to ensure that you understand the additional restrictions and risks involved. For those who want to gain exposure to the Fintech sector and can qualify for Pre-IPO shares, DriveWealth provides a rare investment opportunity with strong upside potential.

Learn about Other Pre-IPO Opportunities Now

Disclaimer: This article is for informational purposes only and does not constitute financial, legal, or investment advice. Pre-IPO shares are typically available only to accredited investors and carry significant risk. Always perform thorough due diligence and consult a financial advisor or legal expert before making investment decisions.