Today, we’re excited to announce Passthrough’s $10mm Series A led by Sam Cates and Patrick O’Shaughnessy from Positive Sum and a number of returning and new investors. At scale, Passthrough will be the pipes powering fund workflow automation for investors, fund managers, and other fintechs — making investing into the private markets a one-click checkout experience.
We knew how messy fund workflows are from our time at Carta and JPMorgan. We launched Passthrough when electronic subscription documents were a curiosity. Service providers created point solutions to save on labor associated with client implementations. But they didn’t solve the core problems of investor onboarding: unstructured information across non-standardized forms.
Standard forms exist where some group can tell everyone what to do. Tax forms like W8’s and W9’s are great examples. You don’t get to choose-your-own. Everyone’s required to use the latest version from Uncle Sam.
In complex environments like the private markets, standardization doesn’t work. And when you try to force it, it leads to a lowest common denominator experience.
Whether it’s subscription documents, investor reporting, or portfolio company reporting, everything’s bespoke. So if you can’t standardize the questions, you have to normalize the answers.
Let’s explain normalization with a simple example. Some subscription documents ask “What’s the Subscriber’s name?” to find out who’s investing. Others ask “What’s the Investor’s name?” They’re different questions, but they have the same answer: legal entity name.
We asked investors 36,000 questions. We identified 800+ data points that cover 80% of those questions. 218 data points are live today.
You get the custom workflows you require. Thanks to the flexible financial identities we create for investors, they can invest with a few clicks.
But investor onboarding isn’t just completed tax and subscription documents. It’s whatever’s needed to bring LPs into a fund. Today, we launch our second product: Know-Your-Customer / Anti-Money Laundering. Available as standalone or fully embedded into your subscription document workflows, investors easily map beneficial owners, we screen them against sanctions lists, and fund managers have the tools to assess and manage risk. And yes, that’s part of an investor’s reusable profile too.
I’m also thrilled to announce that we added Julius Leiman-Cabria to our executive team as Chief Legal & Compliance Officer to guide our compliance product. Julius joins us from Wealthfront and has decades of experience leading legal and compliance at companies like Carta, JPMorgan Chase, MUFG, and the SEC. We’re excited to work with Julius again and for him to work with our current and future customers.
Since we raised our seed round, our team of 26 accomplished the following:
- Launched universal investor profiles with 218 data points (and growing)
- Launched an API for other fintechs, partners, and clients
- Helped 250+ fund managers close $8B+ in capital across 18K users
- Secured our SOC 2, Type I and II with no exceptions
- Got GDPR compliant
- Closed funds in 20+ jurisdictions
- Kept onboarding to 7 business days while maintaining a 94% referenceability rate
- Shrank the typical investors time-to-sign to 20 minutes while requiring zero revisions 80% of the time
- Set a new world-record for fastest sub doc completion at under 2 minutes
Alternative investments are no longer a niche asset class. We see it in regulatory changes: IRAs can invest in alternatives, new and upcoming legislation to change accreditation rules and increase investor limits is here, and retail has risen. The genie is out of the bottle.
Asset managers are shifting to retail. One private bank processes 70,000 subscription documents per year and expects volumes to double within two years. Modern infrastructure like Passthrough must exist to make this a reality for funds, asset managers, and their investors.
We have so much more to share with you this year, including massive improvements to the API experience, partnerships with premier service and software providers, and more. The private capital markets run on Passthrough.
If this excites you, check out our jobs. We’re hiring across the board. And if you’re raising a fund, reach out to us if you want the simplest way to onboard your investors.