A Toronto-based algo-advisor has raised $60 million in a Series A round led by Multicoin Capital to launch a native rewards token, increase the number of ways users can contribute data and expand its headcount. Delphia CEO Andrew Peek said the company offers retail investors an alternative to passive robo-advisors and direct stock-picking through a platform like Robinhood.
Delphia analyzes the personal data shared by its members to make investment decisions and offers long-only actively managed investment strategies with zero management fees and $25 investment minimums. It also has a hedge fund for accredited investors that runs a long-short market neutral strategy of roughly 2,500 US equities.
The investment platform intends to utilize consumer spending insights, employment patterns and public opinion data from social media to deliver algorithmic models previously exclusive to hedge funds. The company will allow its investors in the coming weeks to begin contributing their own data in return for a native token that can be traded or redeemed for membership benefits.
Multicoin Capital Managing Partner Tushar Jain called Delphia a “first mover” in a trend of data DAOs seeking to utilize user-owned data to benefit those users.
“Not only are they getting an ownership stake, but they’re able to invest into the fund and earn alpha off of the data that they contributed,” Multicoin Capital Managing Partner Tushar Jain said of Delphia users.
“If my data helped predict something about asset prices, that can go make me money for my investment account. And I think that is extremely powerful.”
Tokens are useful as a coordination mechanism to get people to do things together, Jain told Blockworks. While play-to-earn game Axie Infitity and Web3 app STEPN pay people tokens to do things, Jain said Delphia is another take on that thesis.
Jain also noted the power of large data sets. He previously co-founded a business called ePatientFinder, which aggregated patients’ medical record data to help find clinical trial and treatment opportunities.
“One person’s data is not that powerful. 10,000 people’s data is not that valuable. Getting into the hundreds of thousands to a million people range, that dataset starts to become substantially more valuable,” he said. “I thought Delphia, being a global data DAO, was extremely powerful when you combine those forces together.”
Delphia has now raised a total of $80 million. Other participants in the latest round were Ribbit Capital, FTX Ventures, Valor Equity Partners, FJ Labs, Lattice Ventures, Cumberland, and crypto entrepreneur and investor Thomas Bailey.
“We’re most excited about rewarding our members with a true data dividend for helping us build the world’s largest user-contributed proprietary data set,” Peek said in a statement. “We expect this token to help us improve the stock selection algorithm for all the participants in our ecosystem.”
Multicoin remains active amid drawdown
Multicoin’s investment in Delphia follows its backing of Hivemapper, a decentralized mapping network with a crypto-integrated dashcam that raised $18 million in its Series A round in April.
Jain said the current drawdown in crypto markets has not slowed venture deals in the space, noting that Multicoin remains actively looking for attractive deals.
JPMorgan analysts wrote in a May 25 report that year-to-date crypto venture capital funding stood at $25 billion. Even after the collapse of Terra’s stablecoin UST last month, which rattled crypto markets, “there is little evidence of VC funding drying up,” they added.
In addition to data DAOs, Jain said his firm is focused on investing in the creator monetization segment as Web3 transforms how artists, musicians, writers and other creators have a relationship with fans
“We are looking for new weird things,” he said. “We really don’t like investing in the ‘n-th’ iteration of something,” Jain said. “That’s not where we think the highest returns lie.”