Founders Fund Backs Vest: Investing in US Stock Market for Latin Americans

Latin American Investors Gain Access to US Stock Markets with Vest

Individuals in Latin America now have a streamlined pathway to invest in companies listed on the Nasdaq and New York Stock Exchange through Vest. This new option is provided by a recently launched, mobile-first brokerage application offering commission-free trading throughout the Americas.

The Genesis of Vest

Aaron Polhamus, CEO and co-founder, alongside Miguel Arroyo and Jaime Rodas, established Vest in December 2020. Their motivation stemmed from a conviction that, despite diligent saving efforts, Latin American individuals have historically not benefited from comparable returns on their capital.

Expanding Investment Opportunities

Vest’s core objective is to deliver direct access to U.S. equity investments for individual investors across Latin America and within the United States. Currently, the platform functions as an active brokerage, enabling users to purchase stocks on the NYSE and Nasdaq.

Future plans include the introduction of a passive investing product – robo funds – and cryptocurrency trading. The company intends to integrate both active and passive investment tools within a unified user interface. This approach aims to avoid the fragmented, multi-platform experience common among investors today, according to Polhamus, formerly the CTO of Mexican fintech Credijusto.

Financial Literacy and Education

Acknowledging varying levels of financial knowledge, Vest has developed a “market simulation environment” for learning and practice. This resource is designed for individuals new to investing.

Furthermore, the platform provides in-app educational content covering investment fundamentals, current events, and economic trends, alongside native multi-lingual support.

Platform Availability and Expansion

The Vest application is currently available for download on both iOS and Android devices throughout Latin America, and in the U.S. states of Arizona, California, Florida, Georgia, New Mexico, New York, Texas, Washington and Puerto Rico.

The startup currently supports integration with U.S. banking institutions and is actively developing direct banking integrations within key Latin American markets.

Seed Funding and Valuation

To advance its mission of creating a “next-generation” investment platform for Latin America, Vest has secured $6 million in seed funding. This round was led by Founders Fund, with participation from Nazca, Class 5 Global, FJLabs, Tamarack Global, and several angel investors.

These angel investors include Kavak founder Carlos García, Tiger Global’s Scott Shleifer, Loft founder Florian Hagenbuch, M1 Finance Founder Brian Barnes, Nico Barawid, Gerry Giacomán Colyer (founders of Casai and Clara), and the Moons founding team. The company is now valued at $22 million, post-money.

Empowering Investors Across the Americas

“We aim to empower investors throughout the Americas to build their financial future through a world-class investment and education platform,” stated Polhamus. “U.S. financial services offer unparalleled efficiency and pricing, and Vest is extending these advantages to the growing retail investment market in Latin America.”

He emphasized that new investors require not only a transactional platform but also a framework for making informed investment decisions.

Navigating Market Volatility

Vest’s founding team remains undeterred by recent stock market fluctuations. They perceive this as an opportunity to emphasize the importance of long-term investing in high-quality companies and assets, rather than attempting to time the market.

A Focus on Long-Term Growth

“Some trading applications prioritize high transaction volumes, enticing customers with the prospect of rapid wealth accumulation,” Polhamus explained. “This is not our approach. We are fundamentally focused on assets under management (AUM), both in our philosophy and our product development for 2022.”

He added, “While short-term challenges may arise, historically, time has proven to be an investor’s greatest ally.”

Polhamus believes that businesses promoting quick profits may struggle during volatile periods, while those advocating sound, long-term investment strategies will ultimately earn customer trust.

Team Growth and Future Plans

Vest currently employs 36 individuals, a significant increase from five a year ago.

The newly acquired capital will primarily be allocated to expanding the product, content, and operations teams, securing necessary licenses for operation in various markets, and establishing strategic partnerships.

Founders Fund’s Investment Rationale

Founders Fund Partner Matias Van Thienen explained that his firm had been seeking an investment and savings platform in Latin America capable of offering global equities with a high-quality product and a compliant regulatory framework. They were introduced to Vest by Carlos Garcia, one of their portfolio founders.

“We invested based on the founding team’s robust engineering expertise combined with a thorough understanding of the regulatory complexities involved in scaling this type of business,” Van Thienen stated.

Unique Market Position

Because Vest is structured as a U.S. brokerage, it can offer global equities while adhering to local licensing requirements in Latin American countries, a distinction from most regional offerings.

Van Thienen also highlighted the platform’s broad appeal, catering to both active stock traders and those seeking a more passive savings approach.

Founders Fund’s Commitment to Latin America

Van Thienen, originally from Argentina and having spent time between there and Miami, has a long-standing interest in the Latin American market. Founders Fund has previously invested in Brazilian fintech Nubank and auto marketplace Kavak.