Nashville-based fintech startup Alto Solutions Inc. will soon pass the 6,000 user mark this year, with more than $500 million of assets under management, while expanding its staff from 17 to 56 people.
Founder and CEO Eric Satz said Alto’s growth is purely from word-of-mouth advertising — but that’s about to change
“We just started our first Google ad campaign and that’s really targeted at the crypto IRA customer,” Satz said. “We don’t want to get confused with the Fidelity’s and [Charles] Schwab’s of the world.”
That’s because most traditional funds don’t offer cryptocurrency investments, but for Alto it’s the company’s fastest-growing segment.
Alto allows investors to use their individual retirement accounts to invest in startups, real estate, digital currencies and private companies. The company was founded in 2018 by Satz, who sold a previous fintech company, Currenex, in 2007 to State Street Corp. for $564 million.
The company is funded by a number of big name investors, including NerdWallet co-founder Jake Gibson, Sequoia’s Scout Fund, Foundation Capital and Amplify.LA, among others.
Last month, the company closed on a $17 million round of funding, led by Unusual Ventures, with participation from existing investors Moment Ventures, Acrew Capital and Alpha Edison.
Satz said Alto plans to use the funds to double its headcount by the end of the year, while growing its financial advisor program.
But Alto’s biggest opportunity may be with its crypto product.
In 2020, 80% of Alto’s investor base was in “traditional alternatives," such as real estate, while 20% was cryptocurrency, Satz said.
This year, crypto has jumped to 35% of Alto’s investor base, as the public becomes more aware and comfortable with the digital currencies, he said.
“It’s been on fire,” Satz said. “Not only is [cryptocurrency] on fire, it’s understood that it’s here to stay. If you look at any movement, in any category whatsoever, there are early adopters, then there are fast followers and there’s mass adoption. The key are the fast followers, to any movement. The first guy is just crazy. The second, third, fourth and fifth, they lend credibility to the first guy. … At the end of first followers [of cryptocurrency] were institutional investors, corporates. … We’ve gotten past the fast-follower now, and now we’re into mass adoption.”
To accommodate that was adoption, Alto’s updated crypto platform will have improved, more intuitive buy/sell functions and an expanded, easier to read dashboard, he said. The platform will also allow users to set up auto-functions that will enable users to buy Bitcoin or other cryptocurrencies on a reoccurring basis.
“Nashville was a southern financial center. … Then through mergers and acquisitions, consolidation,… eventually a lot of that banking center gravitated to Charlotte,” Satz said. “Nashville is going to be the IRA center of the universe, because Alto is here. We can do that because geography no longer matters, technology matters.”
