Midlothian-based investment software startup raises $950K

Investment software company Caravel Concepts, founded by Michael Jones, closed in May on a $950,000 funding round. (Photo courtesy of Caravel Concepts)

An investment software startup is powering the official launch of its products and expanding its team thanks to a recent capital infusion.

Caravel Concepts closed on an equity round of $950,000 in early May. Founder and CEO Michael Jones said the round is being used to finance team expansion and the formal launch of its investment software tools.

The company’s products are aimed at financial advisors. Jones said the tools are intended to offer more tailored portfolio strategies than competing investment planning tools.

“It’s more customized to the client and it uses modern analytic technology and artificial intelligence to allow the advisor to provide a more customized investment strategy,” Jones said.  “The analytical platforms haven’t evolved a whole lot. There’s been a lot of bells and whistles but not a lot of improvement in the underlying analytics.”

The company offers two products: Cmpas (pronounced “compass”), a tool that builds asset allocations based on risk factors; and Maps, which creates customized investment strategies based on clients’ life goals. They can be used in tandem or separately. The software is currently in beta testing.

The plan is to officially launch the software in either late 2022 or early 2023.

Prior to the raise closing early last month, the company had a five-member team, which thanks to the raise had grown to seven people by late May, Jones said. The company also utilizes contracted programmers and plans to be able to increase the number of contractors it calls upon using the raised funds.

The plan is to offer the software tools on a subscription model. Jones said rates were still being determined. He declined to share the company’s goal for number of users.

Caravel Concepts launched in 2020. The company is based in Midlothian and its employees work remotely.

Jones was previously chief investment officer for Wachovia Securities, now Wells Fargo Advisors, and he helped with the creation of the Wells Fargo Envision investment planning system. He said his new venture is an attempt to provide an updated alternative to the program he had a hand in two decades ago.

“The challenge is that a lot of the technology and analytical capabilities that were built into Envision 20 years ago still characterize most planning tools in the marketplace. We think it’s time advisors and their clients got an update,” Jones said.

Caravel expects the funds from the raise to last for 18 to 24 months, by which time it is anticipated that the company will be able to break even, Jones said.

“Based on the reception we’re getting in beta, we’re very excited and might beat those timeframes,” he said.

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