Abstract
Magnetis is a Brazilian robo-advisor that promises to be the next generation platform
for investing. Similar to all
robo-advisors, Magnetis constructs a custom investment portfolio based on the customer’s
needs and risk tolerance. It
then uses algorithms to monitor the performance and to re-balance the portfolio when
necessary. Currently, Magnetis
is asking for US$4 million of series A funding to provide a 24 months of runway. Roughly
half of the funding will
be used to improve the robo-advisor product, and the other half will support customer
acquisition. Magnetis is not
specifying whether the US$4 million will be provided as a high interest loan or be
exchanged for a percentage equity in
the company. The main external stakeholders are emergent, established, and affluent
Brazilians located in the smaller
cities in Brazil’s interior region. In addition, there are two auxiliary stakeholders:
the Brazilian government and
Easynvest—the investment brokerage firm that Magnetis uses to execute trades. Magnetis
must coordinate its business
operations with both of these stakeholders. The main internal stakeholder is the Magnetis
team, comprising of a product
development, business operations, and marketing division. Magnetis has currently provided
very little information on
their proposed deal structure. We anticipate that they would like to raise US$4 million
in exchange for 28.5% equity in
the company.
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