Velvet, a Brazil-based fintech, has launched a secondary marketplace platform to help accredited investors invest in private companies.
The platform was built in partnership with Templum, a capital markets infrastructure provider, and is currently in beta testing.
Carlos Naupari, founder and CEO of Velvet, told RIA Intel that the partnership with Templum allows Velvet to offer a fully regulated, transparent, and compliant way to buy, sell, and trade equity interests in private companies like SpaceX, OpenAI, and Neuralink.
“The United States today is the biggest place for public equities in the world, undisputed. It is also the place in the world where most of the tech innovation happens and hence where most of the value in private marketplaces is created,” Naupari said. “These are very sought-after opportunities, and they are with companies that have limited supply.”
Velvet says it connects with venture capital funds that were early investors in private companies as well as ex-employees with equity who are willing to sell their assets. Many of these funds have lifetime limits of 10 years and must return money to investors so they seek out secondary markets to obtain liquidity and pay back investors, said Naupari.
The investments are put into a special purpose vehicle (SPV), a legal entity that allows investors to pool capital to invest in a specific opportunity.
Velvet was started in 2021 and subsequently raised $200 million in a round of funding, led by Estonia-based venture capital fund Yolo. Before launching the platform, Naupari said the company had facilitated about $30 million in private investments and expects that number to jump to $250 million based on transactions currently in the pipeline. The company has built a strong following in Latin America, has established client relationships with private banks and multifamily offices in Switzerland and Miami.
While the company is focused on providing access to investments in private companies, it plans on offering access to other alternative investments. Including hedge funds, private equity funds, real estate funds, and art and music rights — all accessed through the Templum One network.
“If you talk to financial advisors, nine out 10 these days, say that clients are going to be increasing their exposure to alternative assets in the next five years. And the idea is to also bring to those financial advisors exposure into very marquee and closed hedge funds, private equity funds, and also some more esoteric alternatives like a catalog of music rights,” said Naupari.
However, the company has some competition in the U.S., RIAs are already using exchanges like Forge Global, InvestX, and Sandhill Markets to buy baskets of private stocks.
Naupari said that while their existing clientele resides mostly outside the U.S., they believe that will change in the future.
“Through the partnership with Templum, we’re going to be able to scale faster and also be able to offer a wider array of financial products in the alternative space,” said Naupari. “Our competitive advantage, in this case, is definitely stronger on the offshore side of things but once we execute well on that vision, the U.S. market is next.”
This article has been updated to reflect Carlos Naupari’s title as founder.
