An upstart online broker has attracted a prominent backer: Goldman Sachs.
Motif Investing, a firm based in a San Mateo, Calif., announced on Friday that it had raised a $25 million round of financing from investors including Goldman. Darren Cohen, a managing director in Goldman’s principal strategic investments group, is joining the start-up’s board “as an observer,†Motif said in its announcement.
“This deal provides us with great expertise,†Hardeep Walia, the co-founder and chief executive of Motif, said in an interview. “Raising money is hard enough these days. It’s always better when you have strategic money from people who understand the industry really well.â€
Goldman isn’t the only big name associated with Motif, which opened its doors last June. Sallie L. Krawcheck, a former executive of Bank of America and Citigroup, is on the board. Arthur Levitt Jr., a former chairman of th Securities and Exchange Commission, was an adviser to the online broker before joining the board in February.
Mr. Levitt, who works as an adviser to Goldman, made introductions for Motif and was “very, very important in getting this deal done,†Mr. Walia said.
In addition to Goldman, the venture capital firms Foundation Capital, Ignition Partners and Norwest Venture Partners, which already were invested in Motif, participated in the latest financing round.
Billing itself as an online evolution of investment clubs, Motif allows investors to buy a bucket of stocks centered on a theme, like healthy food, inflation or even rebuilding after Hurricane Sandy. The company charges a flat fee of $9.95 to buy a so-called motif, a portfolio of up to 30 stocks.
In February, the company began allowing investors to create their own portfolios from scratch, and said those investors would ultimately be eligible for royalties if others wanted to buy their themed portfolios.
Mr. Cohen, the Goldman managing director, said in a statement that Motif “has taken an innovative approach to traditional investing.â€
