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Startup company Halo Investing raises mega-funding round – Crain’s Chicago Business

Halo Investing, a Chicago fintech startup working to provide additional retirement savings methods to the average person, has raised $100 million from investors.

The company, founded in 2015, has built a software platform that helps banks more easily offer structured notes, annuities and buffered ETFs to portfolios of everyday investors.

Halo launched focusing on structured notes, stock market investments that give holders protections against market declines, which have historically been reserved for high-net-worth individuals and institutions. By offering everyday consumers structured notes, Halo says it can offer a more efficient and reliable way to save for retirement.

The company was co-founded by CEO Biju Kulathakal, an Illinois Institute of Technology alum and the co-founder of DVD rental kiosk company Redbox. His co-founder, Jason Barsema, an alum of Northwestern University’s Kellogg School of Management, had a career in finance before becoming an entrepreneur.

Barsema, now Halo’s president, says the company has set out to address what he calls a retirement savings crisis.

“The state of people’s savings and retirement, not only in America, but around the world, is the biggest crisis that we face as a population,” Barsema said. “They have stocks and bonds and nothing in between. That’s where we come in. Structured notes can be that perfect bridge to that risk gap.”

“I call it insurance around your investment,” Barsema continued. “You have insurance on your home and you have insurance on your car, but you don’t have insurance around your investments. And that’s why (Halo) is so important.”

Halo sells its software to financial advisors at large banks and investment firms that manage retirement accounts for individuals. Barsema says Halo now works with “thousands” of firms worldwide and more than 40 global banks.

Halo claims its software can reduce 70% of the costs associated with issuing structured notes by automating the manual processes behind them. As a result, the lower costs allow banks and money managers to pass along cheaper services to their customers.

Halo charges transaction fees to its clients but Barsema declined to disclose how much fees are. He also wouldn’t provide revenue and valuation, or comment on whether the company is profitable. But he said Halo was used to conduct $3.5 billion worth of transactions in 2020 and expects to increase transaction volume by 300% to 400% this year. He added that he expects this funding round to be Halo’s last.

The new financing will allow Halo to add more products and services, expand internationally and bring on new clients, Barsema said. The firm currently employs 175 people across offices in Chicago, Switzerland, Singapore and the United Arab Emirates, about 110 of which are in the Windy City. The influx of cash will help it hire even more. The firm plans to add 150 people in the next year, Barsema said.

Halo is the latest Chicago startup to raise a funding round of $100 million or more this year. Others, like logistics-software company Project44, marketing-automation software company ActiveCampaign and risk management software company LogicGate, have also raised mega-funding rounds in 2021.

Halo’s Series C round was led by Owl Capital, a Menlo Park, Calif.-based venture capital firm that’s also invested in Chime, Birchbox, Coinbase and AthenaHealth. Other investors in Halo’s round include Abu Dhabi Catalyst Partners, and existing investors Allianz Life Ventures and William Blair. To date, Halo has raised $120 million.

“Halo is at the forefront of protective investing, enabling individuals to benefit from investments that haven’t been accessible to the masses—until now,” said Abhinav Tiwari, general partner at Owl Capital, in a statement. “We are excited to partner with Biju and Jason to support their explosive growth and vision in making investing more inclusive by democratizing structured notes, one of the last areas of investing that hasn’t been disrupted.”

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