Covey, the first analyst-owned community created to find and reward the world’s next top money managers, closed a $2.5M seed round led by Social Leverage and Portage Ventures with participation from Cue Ball and BoxOne.
The barrier to entry for investing has been lowered thanks to fintechs enabling the mainstream adoption of commission-free investing, microinvesting, cryptocurrencies, and more. However, although someone might have the means to begin investing, retail investors in particular are likely to face obstacles in the way of actually seeing returns, and in turn creating any meaningful wealth. Those that are already actively investing lack market and strategy knowledge, causing over 85% of daytraders to actually lose money. Even 80% of professional fund managers trail behind the S&P 500. Further, many potentially talented analysts are generally locked out of the finance industry due to lacking a traditional education or professional network connections, or the high capital requirement of greater than $200K necessary to start a hedge fund.
Covey was founded as an investment community open to all, to find and rank the best and brightest stock analysts from around the world, so that everyone can benefit from the top performers, creating an unprecedented amount of wealth-making opportunities for all.
For the past year, Covey hosted over a hundred anonymized analysts on the blockchain-enabled platform, tracking their simulated stock picks on Covey’s leaderboard, with the users that have the best performing portfolios receiving monetary rewards. Going forward, Covey will reward the best ideas with tokens, recognizing the members contributing the most to the community. Soon, Covey will award the top 10% of analysts with the opportunity to publish their investment ideas to Covey users, who can then implement the analysts’ strategies for themselves through the Covey platform. This will allow Covey’s users to be able to benefit from the ideas of these proven investors , armed with a transparent view of their performance and investing philosophies, all tracked on the blockchain. Additionally, earning potential is unlimited for analysts as they can receive returns from other users who are leveraging their content.
Covey was founded by Brooker Belcourt, an established investor who spent the last 7 years managing investments for Citadel, a Tiger Management Seeded Fund, and Coatue. Brooker built Covey as a personal tool to simulate and track his own portfolio strategies, but soon realized Covey could be a ubiquitous tool for the future of active management.
“Having spent 7 years personally overseeing ideas at large hedge funds, I learned how hard it was to beat the market, but I also saw a small group of Analysts that consistently won. That talent can come from any background, we need an open platform to find the Analysts that can consistently beat the market and allocate money to them,” said Brooker Belcourt, Founder, and CEO of Covey. “It’s no secret that traditionally, Wall Street has only been accessible to those who could afford prestigious educations or with deep enough pockets to open a hedge fund, but that doesn’t necessarily mean that these are the best people to be heading up investing strategies. Covey is allowing everyone the opportunity to test their strategies and then those with the best performance–whether it be a well-read flight attendant using their downtime to get smart on stocks, a young up-and-coming student who spends a lot of time on Reddit and Twitter, or your traditional financial services industry veteran that frequents the Wall Street Journal–can become money managers based purely on merit. We’ve seen from recent events fueled by retail investors, that when smart, strategic investors work together, they can beat the market, and we’re excited about scaling this community.”
Covey will use the funds to continue building its platform, with an emphasis on its token launching this fall and copy trading launching in 2023. A copy trading functionality will be groundbreaking for both the future money managers and a broader set of investors using the platform as they’ll be able to leverage these proven strategies with more ease and efficiency, allowing investors to make the most of the money they’re able to invest. Additionally, Covey is expanding the engineering team, with plans to almost double its size by the end of the year.
“I invested in Covey because of the founding team, and I believe the best investment analysts have yet to be found. Covey has built both a platform and community that will find and reward the next generation of great analysts,” said Howard Lindzon, Founder and Managing Partner of Social Leverage. “Active investing has been losing trillions to indexing and machines over the last decade, when Covey adds Copy trading it will offer a new generation of active managers the opportunity to practice their trade.”