Fintech platform Oranj is “winding down operations” as of year-end, a spokesperson for the company told ThinkAdvisor Wednesday.
Oranj’s decision to cease operations was announced to its advisor clients on Monday, the spokesperson said. The platform provider opened its doors in March 2014.
Relationship managers at Oranj have been in touch with the firm’s 500-plus advisor clients to help them transition to other fintech firms. Current Oranj competitors include Envestnet, Orion, Riskalyze and AdvisorEngine.
News of Oranj’s closing, first reported by Financial Planning, prompted responses on Twitter.
Scott Salaske, CEO of Firstmetric, tweeted: “This is the problem with a lot of the new #FinTech solutions/companies. They have great and promising products, but can’t compete with the big dogs and the big dogs are not good and often have old technology solutions. Sad!”
Jeff Levine, tax specialist with Kitces.com and Buckingham Wealth Partners, tweeted: “ Ouch. Oranj giving advisors just 6 weeks to find replacement technology. In normal times, making the shift to new rebalancing software in that short a span would be tough… But on top of year-end planning? And w/ holidays? During a pandemic?”
An Industry Trend?
The closure of Oranj comes seven months after Motif Investing shut its doors.
“This is the tip of the ‘tip of the iceberg’; I estimate that we’ll lose 20% of the firms in [Michael] Kitces’ fintech map by this time next year,” said Doug Fritz, founder and president of F2 Strategy in late April. “Many will be purchased or consumed by their equity backers. Others will close.”
Some 62% of those taking ThinkAdvisor’s Twitter poll in April agreed. They said Motif’s closure definitely or likely signaled further closures of investment management platforms, versus 38% who saw further shutdowns as “not necessarily” likely. (Eighty individuals took the survey.)
The Motif shutdown is “a harbinger of what’s to come for other small digital players, as revenues get taken out of the investment supply chain,” said Tim Welsh, head of the consultancy Nexus Strategy, at the time. “Scale means everything now, so you have to be big to make a go of it.”
Others, like Ezra Group CEO Craig Iskowitz, agree that “many closing announcements” are to come. “We’ve seen exponential growth in the number of companies trying to squeeze into this space, especially around digital advice,” he explained earlier this year.