Betterment funding values firm at $800 million

Now with $10 billion in assets, robo receives $70 million in new funding

Jul 24, 2017 @ 1:36 pm

By Bloomberg News

Online financial adviser Betterment has secured $70 million in new funding, boosting its valuation and giving it more clout to compete with rivals in an intensifying market.

The new capital, raised from existing investors, values the New York-based startup at $800 million, up from $700 million in the last financing round in early 2016. Swedish investment firm Kinnevik AB led the round. Betterment said much has changed since the last influx of capital.

"We've grown from $4 billion assets under management the last time we raised to nearly $10 billion now,'' Jon Stein, Betterment's co-founder and chief executive officer, said in a phone interview. "We've also launched more products, added more human advice, and we've got a lot in the works that will make for a really busy fall.''

While Betterment has grown, so have its competitive threats. Industry giants such as Vanguard Group, Charles Schwab Corp., and the largest company in the private fintech market, Social Finance Inc., have recently launched either automated advisers or hybrid versions. Large firms like JPMorgan Chase & Co., UBS Group AG and BlackRock Inc. have also been making advancements in the field, either through creating robots in-house or striking partnerships.

Stein said that with the increased competition, it's important that this new funding go toward expanding the human advice component the company recently added and focusing on the products and features it plans to launch later this year.

Despite poor performance by fintech firms in the public market, Stein reiterated his goal of listing shares and said that this funding will help get them there.

"I think the public markets will value us well and we want to get there as soon as we can, it just can take a long time to build a financial services company,'' he said, adding that the firm has moved closer to profitability since the last round.

LendingClub Corp. and On Deck Capital Inc. have seen their shares slide more than 50 percent since going public in late 2014, and late last year, SoFi pushed back its IPO plans as the sector struggled.

0
Comments

What do you think?

View comments

Recommended for you

Featured video

INTV

Advisers should look beyond 529 plans for college planning

Editor Fred Gabriel talks to reporter Ryan Neal about how college-savings strategies are more important than ever as tuition costs soar.

Latest news & opinion

New ways to pay for college

Experts respond to real-life scenarios of people struggling to afford higher education.

Best- and worst-performing sector funds and ETFs this year

A rising tide may lift all ships, but a bull market doesn't lift all stock sectors. Here are the best- and worst-performing sectors this year, with the top and bottom fund in each sector.

Supreme Court ruling on SEC judges unlikely to upend advice industry

But it could give rise to new hearings for some advisers who are already in litigation with the agency such as Dawn Bennett.

It's official: DOL fiduciary rule is dead

The 5th Circuit Court of Appeals issued a mandate Thursday making its March 15 decision to strike down the regulation effective.

Advisor Group acquires Signator Investors and plans on folding it into Royal Alliance

Advisor Group takes 'orphan' broker-dealer off the hands of John Hancock Financial Services.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print