Moving the fund industry from legacy systems and Excel files requiring heavy manual support to simplified fully automated processes for data harmonisation and regulatory compliance: this is the ambitious objective of Next Gate Tech. The young start-up’s efforts have already received the seal of approval from clients and investors alike.
Lena Mårtensson
With a background in the financial sector in Switzerland, Davide Martucci moved to Luxembourg in 2015 to set up an investment division of a family office. “This gave me an insight into the complexity of the operations that are at the core of Luxembourg’s financial industry,” he remembers. “I also found out that a large proportion of processes and activities are still handled manually. When enquiring why, I discovered that fund managers rely on data from different service providers that are neither standardised nor harmonised, which makes it very difficult to digitise and automate processes.”
When digging deeper into the matter, Mr Martucci became convinced that the hurdles could be overcome with the right technology. He joined forces with a colleague, data analytics expert Semin Ibisevic, to develop an in-house solution for their own needs. Realising that their technology could serve many players in the industry, they founded Next Gate Tech in 2019 to further develop that technology which would bring the missing piece of the puzzle to fund industry operations.
The Next Gate Tech team developed Software as a Service (SaaS) technology focused on data harmonisation and process automation. Little by little, they saw the potential of providing a one-stop shop oversight solution that could deliver automation across all the operations that make up the value chain of the fund industry. Today, the company offers a smart oversight platform that uses machine learning to harmonise data, performs automated controls, simplifies compliance and provides insights into anomalies and their root causes.
Luxembourg is home to a strong concentration of powerful, international companies that have considerable presence here, often with their European hub.
The relevance of the solution is proven by its quick uptake by the industry. “Our clients include service providers such as big banks and fund administrators, as well as all types of in-house or third party asset managers,” says Mr Martucci, who plays the role of CEO. “Luxembourg is home to a strong concentration of powerful, international companies that have considerable presence here, often with their European hub. With this as our perfect port of entry, we have now also secured contracts with client entities in France, Ireland and the US.”
In the space of three years, Next Gate Tech has grown to 28 team members, most of which are quantitative developers, data scientists and financial experts. The rapid expansion has been made possible through several successful fundraising rounds. “Luxembourg-based venture capitalist Expon Capital invested in our seed round in 2019 through the government-backed Digital Tech Fund. Middle Game Venture, another VC based here, invested in us in 2020,” explains Mr Martucci. With support from Luxinnovation, the national innovation agency, the company also successfully applied for an R&D subsidy from the Ministry of the Economy.
In addition to the money, these investments and grants gave us two important things: a valuable network that helps us get in touch with clients and prospects, and a confirmation that our company is robust and reliable enough to be taken seriously by the financial industry.
“In addition to the money, these investments and grants gave us two important things: a valuable network that helps us get in touch with clients and prospects, and a confirmation that our company is robust and reliable enough to be taken seriously by the financial industry. This definitely helped us increase our client base quickly,” Mr Martucci confirms.
To move forward, the company focuses on continuous technology development and increased geographical coverage. “Luxembourg will stay our main hub, but we are looking at expanding to the UK, Ireland, France and the US. We will also continue to hire people to further enhance the features of our technology and offer an all-in-one platform that can automate as many processes as possible in order to meet our clients’ needs.”
Photo credit: Luxinnovation / Laurent Antonelli
