KaChing, a US start-up that lets users follow and mirror the trades of experts online, has raised $7.5 million in a financing round led by Dag Ventures.
KaChing began life as Facebook application that let people create virtual portfolios and compare their performance to their friends.
In October it launched as an SEC-registered investment adviser pitched as an alternative to mutual funds. The site says it aims to democratise the fund management industry by using the Open Source software philosophy of making information free and charging for convenience.
For free, users can follow investors, called "geniuses", who publicly share all their trades on the site. Alternatively, visitors can pay a fee for the site to set up a brokerage account for them that will automatically mirror the trades of geniuses.
The geniuses charge followers a fee that averages 1.25% annually and KaChing takes a cut of this. So far, over $4.5 million has been invested on the site.
Dag Ventures' funding follows an earlier $3 million financing from individuals including Marc Andreessen and Ben Horowitz, Kevin Compton and Doug Mackenzie, affiliated partners with Kleiner Perkins Caufield & Byers, Dave Beirne and Bruce Dunlevie, general partners at Benchmark Capital, Jeff Jordan, CEO of Open Table and formerly president of PayPal and Mike Volpi of Index Ventures.
John Cadeddu, MD, Dag Ventures, says: "Based on the early momentum we've seen, we believe there is an opportunity for kaChing to significantly disrupt the current model of mutual fund investing with a clearly better way to invest. With more than $10 Trillion under management by the mutual fund industry, that's an enormous opportunity."