MDOTM secures $27M to expand AI wealth-management platform
▼ Summary
– MDOTM, a London-founded startup, raised $27 million in growth equity from Expedition Growth Capital to expand its AI platform, Sphere, which automates middle-office portfolio management for banks and asset managers.
– Sphere supports over $100 billion in assets across more than 60 financial institutions, including clients like Morgan Stanley and Amundi, and the funding will fuel hiring and market expansion in the US and Europe.
– The platform has three components: one detects market shifts, a second builds and rebalances portfolios, and a third, StoryFolio, uses generative AI to draft client reports, supported by an academic network.
– MDOTM targets the inefficiency of manual spreadsheet work in portfolio rebalancing and client reporting, addressing pressure from falling fees and demand for tailored portfolios that cannot scale with human analysts.
– To overcome regulatory skepticism, MDOTM keeps humans in control and makes AI explainable, operating under UK Financial Conduct Authority oversight, with new board members including a former Wells Fargo Advisors CEO.
The most active area of AI in finance right now isn’t the high-stakes trading floor. It is the unglamorous middle office, where teams still wrestle with spreadsheets to keep thousands of portfolios aligned. A London-born startup just raised $27 million to automate precisely that drudgery.
That company is MDOTM. It has closed a growth-equity round led by Expedition Growth Capital, bringing its total funding to $36.5 million. Founded in London in 2015, with offices in New York and Milan, MDOTM sells an AI platform called Sphere to banks and asset managers.
Sphere now supports more than $100 billion in assets across over 60 financial institutions, the company reports. Named clients include Morgan Stanley, Amundi, and Zurich Bank. The fresh capital will fuel hiring and a deeper push into the U. S. and European markets.
The spreadsheet problem
Sphere is built for the grind that happens between big decisions. It ingests market and macroeconomic data to flag shifts in conditions. Investment teams layer in their own views, and the software turns all of it into portfolios it can build and rebalance at scale. A generative-AI layer then writes client reports and commentary automatically.
MDOTM splits the platform into three parts. One component spots shifts in market conditions and generates forward-looking signals. A second, Portfolio Studio, builds and rebalances portfolios from those signals combined with a manager’s own views.
A third, StoryFolio, drafts the client reports. Behind it sits the MDOTM Lab, an academic network of more than 20 professors and PhDs working on machine learning, portfolio theory, and AI ethics.
The pitch rests on a squeeze every wealth manager knows. Fees are falling, and clients want portfolios tailored to them. Hiring an army of analysts does not scale.
“The work in the middle still happens in spreadsheets: rebalancing, keeping portfolios aligned with house views and generating client commentary,” said Steve Twomey, the Expedition partner who led the round. His argument is that this layer is where AI can finally do useful work.
A crowded race for the back office
MDOTM is not alone in spotting the gap. In the U. S., former Citadel quants raised $78 million to build an AI system for wealth managers. Banks are shipping their own tools too, such as Starling’s agentic assistant.
The same logic of automating the regulated middle office is spreading well beyond finance, from legal back-offices to hospitals. It lands as Europe’s fintech sector braces for consolidation, which tends to reward firms with real enterprise contracts.
Selling AI to sceptical institutions
Selling AI into investing brings a catch. Money managers answer to regulators, and they distrust tools they cannot explain. MDOTM itself operates in the UK as an appointed representative under the Financial Conduct Authority regime. Its answer is to keep humans in charge and to make the AI show its work.
“Asset and Wealth Managers are no longer asking whether to use AI in investment decisions, but how to deploy it at scale across thousands of portfolios while maintaining control,” said chief executive Tommaso Migliore.
The round also brings grey hairs onto the board. Twomey takes a seat, as does James Hays, a former chief executive of Wells Fargo Advisors with nearly 40 years in the industry.
Expedition backs software firms that have grown with little outside cash, which fits a company that took a decade and $36.5 million to reach this point. The bet now is that the boring middle of finance is where the next wave of AI money will land.
(Source: The Next Web)