Advisor-focused cryptocurrency education and access service provider Onramp Invest has raised $6 million in seed funding, according to a press release. Investors include Ritholtz Wealth Management, WisdomTree, Coinbase Ventures, Gemini Frontier Fund, Eterna Capital, Fox Ventures, Galaxy Digital and Galaxy Fund Management. The seed round was not led by any particular firm, said Onramp CEO Tyrone Ross Jr.
The funding will be used to quickly expand capabilities, including doubling of its engineer workforce from roughly 20 to 40 by the end of the year, building out cash management and other features, which might include "to-the-second billing," and giving advisors the option of being paid in cryptocurrency, said Ross.
Currently, Onramp has 96 RIAs on its platform and offers crypto trading through a partnership with Gemini, according to Ross. Its trading capabilities via a second announced provider, Prime Trust, are expected to become functional Friday or early next week, he added.
Advisors using Onramp can generate emails from within the platform and send those to clients requesting permission to view digital assets held away in Coinbase or Gemini, thanks to integrations with those two firms. Visibility into digital wallets and other exchanges are on the immediate roadmap, according to Ross. Onramp also facilitates the crypto portion of WisdomTree’s +Crypto Model Portfolios.
The firm offers stand-alone crypto education, via a feature called Onramp Academy, which costs $50 per user per month and doesn't include investment management capabilities. “We've seen incredible demand for the academy,” said Ross, who noted that 286 RIAs with a total of $230B in AUM were on the firm’s waitlist to receive academy training.
Carson Coaching is "in talks" about offering Onramp's users "best-in-profession coaching solutions," according to Jamie Hopkins, managing partner of wealth solutions at Carson Wealth. Details were still being hashed out between the two parties, but Hopkins confirmed that he is an investor in Onramp.
With the injection of funding, Ross is considering several major feature expansions. Like many fintech platforms, Onramp “is champing at the bit” to add cash management, said Ross, so the firm can take a spread on assets held on the platform. To do so, however, would require Onramp to register as a broker-dealer, or even a trust, he said.
Registered broker-dealers can provide services like custody and money movement, which Onramp can’t do at the moment, he said. While still in the exploration phase, Ross said registering as a b/d would give Onramp more options to provide additional services and increase its revenue streams.
Cash management is “a good opportunity for Onramp to earn some revenue,” said Wally Okby, senior analyst for Aite-Novarica’s wealth management division. “From what I understand individual clients keep minimal cash in those exchanges, but I don’t think it would hurt. There’s definitely room for them to earn a spread.”
Future plans at the firm also include building a rebalancing feature and a “model market center” for crypto portfolios inside of the platform, said Ross.
Another value proposition, perhaps unique to crypto because of its volatility, would be to allow advisors to bill at miniscule time increments. Onramp is considering giving advisors not just the option of being paid in crypto, but also to bill on up to a per-second basis. The non-traditional time increment would allow advisors to capture more value from volatility than they could on a quarterly, or even monthly, basis.
“We want to give advisors the ability to get paid in kind. If they want to get paid in Bitcoin, or they want to get paid in Ether, they can do that,” said Ross. “We're going to turn billing on its ear.”
Onramp launched its educational platform earlier this year in conjunction with announcing an Advyzon integration. Ross was named CEO of the startup last summer.
Editor's note: After publication, an Onramp spokesperson clarified Tyrone Ross' assertion that Carson was an RIA client of Onramp's. The client is in fact Carson Coaching. The story has been edited.