Betterment raises $60 million in new venture capital

In a new round of funding, Betterment has raised $60 million from private equity firm Francisco Partners, increasing the firm’s total of investments to nearly $105 million.
The new deal for Betterment, a robo-adviser that offers clients diversification and automated rebalancing, highlights the promise robo-technology has in the industry.
“Our whole platform is technology-driven,” Jon Stein, CEO and founder of Betterment said. “What we do is akin to the services if you had millions of dollars and paid for an investment adviser, but it’s accessible to anyone.”
“We didn’t need to raise the money today,” Mr. Stein said, adding that the company has $20 million in the bank still available to use. “We’re getting a lot of interest from investors.”
Mr. Stein said the company will allocate its new money to efforts such as faster transactions and rollovers as well as branding for adviser apps and services. Overall, Betterment plans to optimize its system to reduce the amount advisers would pay in fees and taxes as well as using data analytics. It will help give their customers “a better picture,” according to Mr. Stein

@Betterment congrats on the massive round from actually a legitimate top tier investor people heard of. Fastest growing software advisor!

— Igor Lotsvin (@lotsvin) Feb. 18, 2015

Francisco Partners, which focuses on technology investments, has raised $10 billion in capital for investments in technology companies since it started more than 15 years ago. One focus in particular for the company is financial technology.
“We’re very passionate that software and technology is changing the way people do things,” Peter Christodoulo, a partner at Francisco Partners, said. “This is another technology disrupting the wealth management sector to provide solutions for wealth management needs.”
Mr. Christodoulo said what makes Betterment different is the firm’s use of vertical integration and fast-paced investment solutions, which provides personalized advice and investments made the same day. He said the fact that Betterment has 65,000 customers that invest proves the firm’s usefulness.
“We’ve been waiting for a software solution to make it more efficient and that’s what Betterment does,” Mr. Christodoulo said.
News of the funding was first published by Reuters on Tuesday, when the news agency broke an embargo. The story still lives on the web through aggregators such as Yahoo! Finance. An official announcement is scheduled to be released on Thursday.