• Magnetic is leading NaroIQ’s seed round to build a European digital fund infrastructure provider.
• NaroIQ’s integrated platform digitizes and modularizes indexing, portfolio management, fund accounting, transfer agency, compliance, liquidity monitoring – all exposed via APIs.
• The company is building core and critical financial infrastructure, from the ground up.

The Background

Europe’s asset management landscape is at a crossroads. Despite overseeing roughly €23 trillion in UCITS/AIF assets, the fund servicing backbone remains anchored in legacy, manual workflows that inflate costs, slow time-to-market, and concentrate power among a few large providers, mostly non-European ones. European managers and fintechs alike demand a modern, home-grown infrastructure. Fund launches still often involve weeks-long setups, Excel-driven NAV runs, and PDF-email chains for investor documents. This mismatch between front-end digital experiences and back-end inertia is squeezing margins: over the past five years, AuM grew ~8.8%, yet profits climbed only ~0.7%. As regulatory demands (MiFID II, UCITS/KIDs, ESG reporting) intensify and investors expect real-time transparency, the status quo is unsustainable. Europe needs its own “fund operating system” to preserve diversity, foster innovation, and prevent further concentration of market power.

NaroIQ addresses this by offering a vertically integrated, API-first, cloud-native platform. Clients can launch and manage ETFs and funds with lower cost and effort: from BMR-compliant indexing to real-time portfolio risk checks, in-house NAV calculations, automated transfer agency and compliance workflows, and continuous liquidity monitoring. Vertical integration ensures smoother data flows, stronger audit trails, and faster launches under EU regulation. The platform’s modular design allows fund initiators to start with a single capability – like indexing – and layer on additional modules as they scale.

Observing the team around founders Chris Puellen and Nils Krauthausen over the past two years has shown us their absolute obsession with solving this problem. Their grit, perseverance and attention to detail, inside a complex and paper-heavy industry, are outstanding.

The Magnetic Perspective

NaroIQ is a classic case of complex software – a larger, longer-term, systems design transformation of a critical sector. As we have written before, complexity often means higher demands on total product delivery but a significantly larger moat. This is what makes NaroIQ such a standout, fundamental opportunity. It resonates with our approach to back such transformations decisively from the earliest stages. The company’s market timing is excellent as we are entering a phase of fundamental modernizations in historically slow or traditional industries.

NaroIQ is also a pre-eminent example of a critical industry technology, driving European financial sovereignty. Currently, US-based firms manage two-thirds of European ETFs and handle administrative work for four-fifths of them, while the top five ETF issuers control ~75% of market share. NaroIQ’s vision of a robust European alternative aims to democratize access substantially: enabling smaller and mid-sized fund providers to launch and manage products profitably, preserving a diverse ecosystem and preventing an alarming concentration of power.

Digital transformation in fund servicing is no longer optional – it is critical to industry survival and competitiveness. By backing NaroIQ, we are supporting a future where European asset managers of all sizes can launch and manage funds with agility, transparency, and cost efficiency. We are excited to be supporting the team in this.