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BNY Mellon and Lunate Team Up to Build $300mm WealthTech


BNY Mellon and Lunate, a $50b Abu Dhabi based private equity/alts firm, are teaming up to build-out an entire end-to-end advisor platform from the ground up for the MENA market. And they are going to spend $300mm doing it. It's certainly not the sort of thing you see every day.


Building from scratch is a wonderful pleasure. Done correctly, it allows you to harness all that is exciting about the tech advances we have had over the last 10 years. But greenfield tech projects at large companies often have trouble, so it does have us scratching our heads a little bit on a few points. Perhaps as we learn more about this it will be clearer.


Building internally gives you the most flexibility and customization. That could be an important factor when trying to customize a product for the MENA market. But it also takes a lot more money and can lengthen time-to-market vs what a true start-up can do, which is one of the principals behind "tech buys" or strategic acquisitions to access pre-built technology. I am sure many WealthTech entreprenuers are looking at that $300mm number and thinking they could build it a lot cheaper.


The decision to build from the ground-up is also noteable as time-to-market in the WealthTech market is currently of paramount importance. They are saying that it will start serving clients in 2024, which seems like an overly aggressive time table, although I will point out that Ainslie Simmons was able to do something similar at PershingX/Wove, so perhaps they are going to run with her playbook.


Of course, the $300mm could also include a tuck-in acquisition budget, giving the new venture the ability to customize the chasis and rapidly bolt-on functionality via acquisition. Perhaps that is the best of both worlds. If it works, we could see more of this in the future. But, only time will tell.


Here is a link to the press release: Link



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