The Series B investment takes the company’s total capital to more than $20 million. According to reporting at TechCrunch, the funding will help FutureAdvisor reach its goal of doubling its workforce to 40 by year’s end.
The round was led by Canvas Venture Fund’s Rebecca Lynn, and included participation by Sequoia Capital. Finovate Fun Fact: Rebecca is on the board of another Finovate alum, Lending Club.
FutureAdvisor sets itself apart from its peers with its promise to bring “premium investment management” to the masses. The company’s key differentiator, in addition to targeting a more upper middle class rather than “affluent” clientele, is that its technology is designed to help people best set up and manage their current IRA and/or 401(k) accounts.
What this approach may lack in scope – competitors focus more on creating new accounts rather than managing existing ones – it gains in practicality. With 401(k) plans alone representing 18% of the more than $19 trillion U.S. retirement market, there is plenty of opportunity for an investment management service with that kind of focus.
FutureAdvisor provides investment advice as well as rebalancing services. Without charge, investors can have their portfolios optimized using FutureAdvisors investing algorithms. For actual money management services, from monitoring and rebalancing to tax-loss harvesting, FutureAdvisor charges an annual management fee of 0.5%.
Founded in Seattle in May 2010 and now headquartered in San Francisco, FutureAdvisor has more than $110 million in assets under management. Bo Lu is CEO. The company demoed its Premium Service at FinovateFall 2013. See the demo here.