Automated investment service, Wealthfront, announced this week that it now has $1 billion in assets under management. This is fast-paced growth, considering it had $100 million under management in early 2013, $500 million by December of 2013, and $800 million in March of this year.
This growth confirms the trend we’ve been seeing in the explosion of automated wealth management fintech services, the oft-called robo-advisors.
U.S.-based companies such as Betterment, LearnVest, Personal Capital, SigFig and European companies Nutmeg, Money on Toast, and rplan are all vying for consumers’ portfolios, trying to compete with superior algorithms.
Palo Alto-based Wealthfront differentiates itself by offering a Single-Stock Diversification service. This service enables users with a large portion of their net worth tied up in a single stock to transfer their holdings to Wealthfront, which will slowly sell off the stocks commission free, and with a tax-aware approach. While the service is currently available only for Twitter employees, ex-employees, and its investors, Wealthfront plans to open it up for more companies in the future.
Wealthfront demonstrated at FinovateStartup 2009, when it went by the name KaChing.
Investment management service Wealthfront will have some investment management of its own to do in the coming weeks and months: the company just reported that it has raised $35 million in new capital.
The funding round was led by Index Ventures and Ribbit Capital, and included the participation of existing investors such as The Social+Capital Partnership, Greylock Partners, and DAG Ventures.
Wealthfront’s total funding now stands at $65 million.
Wealthfront is one of the largest automated investment management services in the world. In a market crowded with competitors, Wealthfront continues to see a bright future in automated investing thanks to the 90 million person, $2 trillion dollar millennial generation.
Said the company in a statement
: “(Millennials) have grown up with software and lived through two market crashes. They overwhelmingly seek an investment solution that is automated, index-based, and low-cost.”
A few metrics from Wealthfront:
- Growth of more than 700% since the beginning of 2013
- Manages more than $500 million in customer accounts
- Client accounts range from $5,000 to $10,000,000
- More than 55% of the company’s users are below the age of 35
We last reported
on Wealthfront when the company launched its new mobile app back in February. The mobile app lets users check account balances, view investment performance, and transfer funds to Wealthfront accounts.
Wealthfront (as “kaChing”) demoed on the Finovate stage as part of Finovate Startup in 2009
. Former COO Adam Nash was promoted to chief executive officer in January 2014.
Now available on iOS, Wealthfront’s new mobile app makes it easy for investors to manage their money on the go.
Features on the mobile app include:
- Account balance check
- Investment account performance view
- Fund transfer to Wealthfront accounts
Wealthfront provides personalized investment management for customers with accounts as small as $5,000. The company’s automated diversification and account rebalancing help keep costs low. And customers with larger account sizes can take advantage of additional features like free, daily tax-loss harvesting ($100,000 or more) and commission-free trading ($10,000 or more).
A variety of account types are supported by the platform, including taxable, IRA,and 401(k) rollover accounts.
Wealthfront is one of Finovate’s oldest alums, demoing as “kaChing” at Finovate Startup 2009. The company now has more than $500 million
under management, and recently announced
the promotion of its COO, Adam Nash, to Chief Executive Office.
Just over a year after joining Wealthfront as Chief Operating Officer, Adam Nash has been tapped to succeed founder Andy Rachleff as President and CEO. Rachleff will take on the position of Chairman.
Adam Nash has a diverse background in engineering, product management and strategy, and venture capital. Educated at Stanford and Harvard Business, he has held executive positions at LinkedIn, eBay and Atlas Venture, the latter an early stage venture capital firm. Adam blogs about technology and finance at his personal website, Psychohistory, at blog.adamnash.com.
What’s interesting about the pick is that Rachleff says he saw a CEO in Nash from the very beginning. Rachleff wrote about the announcement on his blog, “In fact, I actually wanted Adam to join as CEO, but he felt the infrastructure we needed to build would require his full attention in the short term.”
We now know what was meant by “short term.” Nash takes the helm of the company at a time when Wealthfront is experiencing significant growth
. The alternative investment advisory industry in general, particularly online advisory, also has attracted the attention of mainstream media like the Wall Street Journal and CNN, which named Wealthfront among its 15 best financial websites and apps
Wealthfront was founded as “kaChing” in 2008, and has since grown into one of the major onine investment advisory services, with more than $500 million in assets. One of Finovate’s earliest alumni, the company is headquartered in Palo Alto, California.
And you thought the stock market had a great 2013.
Online investment manageme service Wealthfront announced this week that it now manages more than $538 million in assets. Given that the company began 2013 with assets under management of approximately $100 million, it is no exaggeration to say that Wealthfront is doing a strong job of attracting investors looking for alternatives to traditional financial advisory.
Wealthfront credits its rapid growth on two factors: the rise of passive investing and the entry of the millennial generation into their investing years.
Some interesting metrics about Wealthfront and its clients:
- More than 55% of the company’s users are under 35 years old
- More than 80% of the company’s users are under 50 years old
- The average investment with Wealthfront is between $80,000 and $100,000
- More than 16% of Wealthfront’s users have a liquid net worth of more than $1 million
At the same time, it is worth pointing out that Wealthfront is not just for rich guys and gals. A fifth of the company’s investors have less than $50,000 in liquid net worth.
Growth in the online investment advisory business is a good thing for Wealthfront – not the least because the company is far from alone in the space. Among Wealthfront’s rivals are companies like Betterment, Personal Capital, and SigFig, as well as similar services with slightly different models such as FutureAdvisor, Jemstep, and LearnVest (and, yes, Finovate alums all).
Formerly known as KaChing, Wealthfront picked up $20 million in funding
in March of last year. This took the company’s total investment to $30.5 million. Wealthfront was founded by Andy Rachleff, former co-founder and general partner of Benchmark Capital, now serving as Wealthfront’s president and CEO.
The company was among the earliest of Finovate alumni, showcasing its technology as part of FinovateStartup in 2009
Cheers to a new year! After ringing in 2014, we wanted take a look back at the capital raised by Finovate alumni in 2013. It was quite a year, with alums pulling in $825 million, $365 million more than in 2012 for an increase of about 80%.
2013 funding summary:
- 62 companies raised $825 million
- Q4 had the most capital, with a total of $294 million raised by 17 companies (more than half by Xero, which landed $150 million).
- October was the busiest month, with $177 million raised (mostly Xero’s $150 million)
- May was second highest with $91 million raised by 7 companies
Last year Finovate alums took in almost twice as much as 2012, when 44 Finovate alums collectively raised
$460 million. The chart below shows the quarter-by-quarter comparison for both years.
— blog post
More than $155 million raised by 14 companies
January — $57 million raised by 6 companies
February — $56 million raised by 5 companies
March — $42 million raised by 4 companies
— blog post
More than $205 million raised by 15 companies
June — $81.7 million raised by 6 companies
May — $91.5 million raised by 7 companies
April — $32 million raised by 2 companies
— blog post
More than $171 million raised by 22 companies
July — More than $63 million raised by 8 companies
August — More than $26 million raised by 6 companies
September — $82 million raised by 9 companies
More than $294 million raised by 17 companies
October— $177 raised by 6 companies
November — More than $87 million raised by 7 companies
December — More than $30 million raised by 6 companies