Alto closes USD17m Series A funding round
Alto Solutions, a self-directed IRA platform aiming to make it easier for individuals to access and invest in alternative assets using their retirement funds, has closed a USD17 million Series A funding round led by Unusual Ventures, with additional participation from existing investors Moment Ventures, Acrew Capital, and Alpha Edison, and strategic investments from Carta, Coinbase Ventures, Franklin Templeton, New York Life Ventures, and Stone Ridge Holdings Group.
Alto will use the investment to accelerate the development of new products, further enhance its existing capabilities, and expand its product and engineering teams.
“Opening a self-directed IRA to invest in alternative assets like startups, real estate, or cryptocurrency should be easy,” says Eric Satz, founder and CEO of Alto. “I founded Alto after spending weeks of frustration trying to navigate the outdated manual processes used by legacy self-directed IRA custodians, not to mention their endless fee menus. There’s a lot of friction and unnecessary costs in the self-directed retirement industry, and Alto is on a mission to eliminate them. This funding round will rapidly accelerate the implementation of our vision and product roadmap.”
According to the Investment Company Institute, as of 2020, approximately USD33 trillion was held in retirement accounts in the US alone. Yet, individuals have only allocated an estimated 2-5 per cent of that to alternatives. Meanwhile, ultra-high-net-worth individuals and sophisticated institutional investors like college endowments often hold 20-50 per cent or more of their portfolio in alternatives.
Sarah Leary, co-founder of Nextdoor and partner of Unusual Ventures will join Alto’s board of directors.
“Unusual Ventures is thrilled to lead Alto's most recent round of funding. As the investment community expands its focus to include alternative assets, like cryptocurrencies, private equity, private credit, and real estate, we think individual investors should not be left behind," she says. "Alto's self-directed IRA platform has been built from the ground up to provide individuals a seamless, tax-efficient way to invest in alternative assets using their retirement savings. We are excited to help fuel Alto's efforts to help democratise participation in these exciting alternative asset opportunities.”
Shan Aggarwal, Head of Coinbase Ventures, says: "We began our relationship with Eric and Alto in 2019 and have observed the strength of their team and growth potential first hand. We're excited to participate in this latest funding round and continuing to partner to make it easier for individuals to invest and trade cryptocurrency in tax-advantaged retirement accounts."
Ammar Hanafi, General Partner of Moment Ventures, says: "True portfolio diversification requires an allocation to a broad range of public and private investments, including alternative assets. Roughly 70-plus per cent of all US savings are held in retirement accounts, and only 2-5 per cent of that is invested in alternatives, which tend to be illiquid and have longer investment horizons. Alto provides an easy way for individuals to diversify their portfolios, using their retirement funds in a way that up until now has only been available to the wealthiest in this country. We’re thrilled to welcome Unusual Ventures to the Alto Board, and Coinbase, Franklin Templeton, New York Life Ventures, and others as new investors."