Our investment in Hadrius - The SEC Compliance Autopilot

Hadrius automates the entire SEC ongoing compliance process with AI for financial firms.

Note: Attack Capital is an investor in Hadrius through our Demo Day Fund.

TLDR:

• The Hadrius team was previously running an SEC-registered investment advisory firm, they built Hadrius to automate their own compliance processes.

• Currently, an estimated 30,000+ financial firms spend around $16b+ a year or 10K+ per employee on streamlining regulatory compliances in the United States.

• Most financial firms rely on using 2-decade-old software or are paying for third-party consultants and law firms for most of their manual compliance work. 

• Using Hadrius, compliance teams can automate their compliance processes and save around 80-90% of their time, plus they save the additional cost of managing large compliance teams and hiring consultancy and law firms.

---

Som Mohapatra, Thomas Stewart, and Allen Calderwood are building Hadrius, a platform to automate the compliance process for investment managers using AI, saving them 80-90% of their time.

For Som, Thomas, and Allen, Hadrius is not their first rodeo, they have previously built Quantbase, “a suite of automated portfolios which makes high-risk investing effortless.” The New York City-based startup raised $500K from Witz Ventures, Dorm Room Fund, Trolley Ventures, Soleil Capitale, YC alumni, and Thirdline Capital head Larry Eiben.

Quantbase is a platform where funds can build custom investment portfolios, market it to their retail following and grow AUM. The Quantbase team realized that most retail investors are getting discouraged by the public markets and chasing unregulated and YOLO high-risk bets like crypto - most of which will lose money. To provide a safe approach to risky assets for new investors, they built Quantbase - where high-risk hedge funds- can provide access to their custom portfolios to retail investors.

Today, Quantbase has $70M in committed assets, more than 5000 clients, and around 20 partner firms. Their most successful partner Quiver Quant with a 1.2M Tiktok following posted a whopping 43.08% in annual returns through their custom “Quiver Congress Buys” portfolio which tracks the stock transactions of top government officials such as Nancy Pelosi and others. 

THE BIGGER FISH

While building Quantbase, the team realized that they were spending enormous amounts of effort and time managing compliance. They started by looking for existing compliance solutions only to realize that there are hardly any solutions that can keep up with the ever-changing compliance landscape of the 21st century. Most financial firms are still using 2-decade-old software or are paying for third-party consultants and law firms for manual work. 

To address the pain point, they started building compliance software for themselves. A workflow tool that automates the entire SEC ongoing compliance process with AI saving compliance teams hours daily on manual reviews, filings, and audit prep - a software which they named Hadrius.

With the help of some quick napkin math, they estimated that 30,000+ financial firms spend around $16b+ a year or 10K+ per employee on streamlining regulatory compliance in the United States. The additional man hours and grunt work involved really gives firms the incentive to look for other potentially time & cost saving solutions. Hadrius could be that perfect product to tackle compliance issues for all financial firms.

QUICK INTRODUCTION TO HADRIUS

Hadrius, while automating the compliance process for investment managers, also comes with an intuitive dashboard that gives full control over tasks and flagged items. Compliance teams only need to go over the flagged items instead of going over the entirety of documents, saving around 80-90% of the time while also being transparent about the process.

Hadrius comes in handy anywhere you need to maintain clear language and context - which for financial firms is everywhere.

Hadrius connects with firms’ email, Slack, social media posts, and ensures continued compliance, and automatically flags potential issues. The platform provides real-time monitoring and analysis of communication channels for tasks like marketing reviews, website reviews, and correspondence reviews. Using the platform, firms benefit from an average compliance saving of $10,000 per employee annually and are easily able to meet their compliance obligation accurately and efficiently.

THE TEAM

Thomas Stewart, who is also the CEO of Hadrius, previously built a hyper-local social media app that lets small businesses connect better with their customers. The app was acquired by Copiri Inc, a virtual marketplace that connects people with a shared passion. 

Som Mohapatra founded Unibursal when he was in college, an app that lets users quantify and trade on people’s opinions. While Allen Carderwood started his career at Google and later at the neobank Chime as a Senior Software Engineer before quitting to build Quantbase with Som and Thomas. 

The Hadrius team is a team of builders, they have built great products both individually and together. They also have experience of not just building Quantbase and scaling it to 5000+ clients, which adds that additional touch they need to build and scale Hadrius to even bigger heights than any of their previous ventures.