In its latest round of funding, Ellevest, a robo-adviser for women co-founded by former Wall Street executive Sallie Krawcheck, has raised $9 million.
Professional tennis player Venus Williams, Ariel Investments president Mellody Hobson and Aspect Ventures founder Theresia Gouw are among the investors in the New York-based registered investment advisory firm, according to a company statement Thursday.
The fintech start-up led by Ms. Krawcheck seeks to close the gender investing gap, which the firm says can cost women millions. "They just don't put as much money in the market," Ms. Krawcheck said by phone. "The retirement savings crisis in this country is disproportionately impacting women."
Ellevest hardly considers itself niche. Women are half the U.S. population and control $5.1 trillion in wealth, “and yet they still report being poorly served by existing offerings,” the firm said in the statement. The start-up has conducted research with women to create an investment platform that better serves them, in part by using a proprietary algorithm that considers their particular salary peaks and longer life spans.
"Women's salaries sadly peak sooner than men's do," Ms. Krawcheck said. "We're putting together a highly customized investment portfolio."
Ellevest, started in 2014 by Ms. Krawcheck and president Charlie Kroll, provides active investment planning and monitoring that's based on goals such as starting a business, buying a home and retiring well.
A year ago, Ellevest raised $10 million in a funding round led by Morningstar Inc. that included investments from Metropolitan Capital Advisors co-founder Karen Finerman and Mohamed El-Erian, chief economic adviser at Allianz SE, according to the statement.
While Ellevest doesn't exclude men as clients, the firm is focusing on women who have paid off their high-interest rate credit card debt and have control over the money they've earned, Ms. Krawcheck said. She declined to disclose the number of clients the firm has or its assets under management.
Ellevest continues to raise money after another women-focused robo-adviser, SheCapital, decided to shut down. Founder Tina Powell, also the director of business management at Beacon Wealth Management in Hackensack, N.J., said in July that SheCapital required a heavy time commitment and did not gain the traction she had hoped for. Six clients had signed up since August 2015, and all moved their business, totaling $1.3 million in assets, to Beacon.