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Upside lights the exit lamp for St. Louis investors

Upside lights the exit lamp for St. Louis investors

Juney Ham

Juney Ham, co-founder and president of Upside

When a Chicago company buys a San Francisco company, it’s usually not a big deal here.

The sale of financial technology firm Upside, however, is a story that belongs as much to St. Louis as to anywhere. In the past 18 months Upside managed to find investors and mentors and hire an engineering team here. Co-founder Juney Ham even moved to St. Louis and became a sought-after adviser to other technology startups.

Upside was sold Thursday to Envestnet, a publicly traded brokerage-services company based in Chicago. The purchase price wasn’t disclosed, but Cliff Holekamp, a general partner at Cultivation Capital in St. Louis, said his firm made a profit on its investment in Upside.

So did SixThirty, a financial accelerator program that local investors formed in 2013. The idea was that St. Louis should leverage its strength in the financial services industry to attract startups in that sector. Upside was one of SixThirty’s first investments, and now is its first exit.

For Holekamp, the Upside deal is more than just a financial success. It’s also a validation of St. Louis’ entrepreneurial support system. “Upside realized the value of St. Louis and decided to come here,” he said. “I really believe they wouldn’t be where they are today if it weren’t for St. Louis.”

Upside’s founders, Ham and Tom Kimberly, came to St. Louis in the fall of 2013 after being selected for SixThirty, a program that includes a $100,000 investment and six months of intense mentoring.

During the program, Upside switched from a retail to a wholesale strategy for its robo-adviser platform, which provides a low-cost portfolio that’s customized to suit each person’s investment goals. Instead of marketing to individual investors, the firm now provides a private-label product that’s marketed to financial advisers.

The change obviously made the company more attractive to a buyer like Envestnet, which sells software and services to 40,000 advisers nationwide.

“We got a lot of great feedback from advisers and other people in St. Louis,” Ham said. “We were going in that direction, but the feedback helped us accelerate the decision making process.”

Ham, a former executive at Expedia and Airbnb, has enjoyed being part of the emerging entrepreneurial culture in St. Louis. “We’ve been adopted by the community in a lot of ways,” he said. “It’s been a really rewarding part of the experience to be able to share things I’ve learned with other entrepreneurs, and I’m still really excited about what is happening here.”

Ham and Kimberly, who is CEO and based in San Francisco, will become senior vice presidents of Envestnet, and Ham is staying in St. Louis for now. “For the immediate term, I’m here to make sure the team continues to grow,” he said.

Stuart DePina, a group president at Envestnet, said the company would like to add to Upside’s five-person St. Louis staff. “Finding development talent is always a challenge, and we’re hopeful St. Louis can become a technology development center for us,” he said.

More jobs would make this deal even better for St. Louis, but it’s already something to celebrate. While the area has dozens of promising startups, only a handful of local entrepreneurs have had successful exits.

Two occurred last summer when Yurbuds, the home-grown earphone designer, was bought by Harman International and Answers Corp. was bought by private equity funds.

Now we can add Upside to that list. It wasn’t founded here, but it came here by choice, which is even better.

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