Automated investing platform Composer raises $6M
Composer, an automated investing platform for retail traders, raised $6 million in new funding led by Left Lane Capital.
Why it matters: Despite a pullback in the broader stock market, VCs still have an appetite for trading platforms that give retail traders better tools for making investments.
How it works: Composer gives retail investors an easy-to-use, no-code tool that can be used to build, backtest and auto-execute sophisticated algorithmic trading strategies that previously were not easily accessed by the typical retail investor.
- Investors on the platform can create so-called "symphonies" — systematic investing strategies that react to market conditions and rebalance portfolios based on parameters that users define.
- Once created, users can then backtest those strategies to see how they historically would have performed relative to the market, refine them, and share them with other investors on and off the platform.
Context: Founder and CEO Benjamin Rollert began building Composer after attempting to code his own systematic trading scripts.
- "This was to implement some basic systematic trading strategies that I knew that institutions and hedge funds were using," Rollert tells Axios. "It was through this process that I discovered it was actually extremely difficult to implement these types of strategies as a retail investor."
- And he hopes to position Composer as an alternative to retail-focused stock-trading apps and automated investing platforms. "There are these very polarized set of offerings that are either very gamified trading apps or very stuffy, paternalistic roboadvisors," Rollert says.
Yes, but: For users who aren't as adventurous or confident about creating their own trading strategies, Composer has an in-house investment team that provides templates its users can invest in directly or easily modify to their liking.
Yes, and: While other trading platforms are seeing reductions in net inflows, Composer says it continues to grow despite a pullback in the broader stock market.
- "There's more AUM on the platform than net deposits," Left Lane Managing Partner Harley Miller says. "Which shows in aggregate Composer clients are probably doing better than the market at large right now."
Of note: With this latest funding, Composer has raised a total of $11 million, which includes backing from investors such as First Round Capital, AVG Basecamp, Draft Ventures and Not Boring Capital.