As retail investors get crushed by market conditions, Delphia, a mobile-investment platform, wants to give them an edge to better square up against hedge funds and other institutional investors.
The stock-picking startup with algorithmic and crypto features plans to reward users for access to their data, a model that helped it close a new $60 million Series A led by Multicoin Capital. Other investors in the round include FTX Ventures, fintech-focused Ribbit Capital, M13 and Lattice Ventures.
The startup’s “share-to-earn” data token model will reward users starting this summer for contributing valuable information, which it will then use to help its model better pick stocks. The company offers two sorts of investing methods, one of which is free (its stock picks) and a long/short blend that is open to accredited investors. Fees paid by the wealthier investors are used to help reward data-providing users, who can get their rewards in the form of either cash or tokens.
Delphia's data token model will function as a decentralized autonomous organization (DAO), votes for which are tied to its ERC-20 token that data-providing users receive for sharing their information.
“DAOs are new tools for managing assets, risk and data. We’ve already seen plenty of experimentation with assets and risk, but not with data,” Tushar Jain, managing partner at Multicoin Capital, said to TechCrunch. “Long term, I see data DAOs going after new business models that go beyond crypto markets to compete with some of the largest data-centric companies in the world.”
Delphia also aims to level the playing field between institutional and retail investors by leveraging consumer spending insights, employment patterns, and public opinion data from social media to deliver algorithmic models that were traditionally reserved for top-performing hedge funds, it said.
“Our thesis is that users will willingly contribute their commerce, device, search and social media data in exchange for tokens, which serve as both their interest in the data’s aggregate value and their governing power,” Jain said.
Since Delphia’s fund aims to have a competitive advantage through access to proprietary data, it plans to reward contributors through “data dividends,” or its reward program, giving back to those who provide data on its mobile applications, Andrew Peek, CEO of Delphia, wrote in a post.
“Data (specifically proprietary data) is a sustainable competitive advantage,” Peek wrote.
The app plans to use the capital to launch its native rewards token, increase the different ways users can contribute data and expand its team.
Delphia hopes that its algorithmic investing, as well as new data collectives from users, can help investors improve their financial prosperity, Peek noted. “At the end of the day, none of us can pick stocks as well as all of us can.”