Robo advisor Personal Capital just raised $50 million as it gears up for an IPO

Jay Shah, CEO of Personal Capital

  • Personal Capital, a digital wealth management platform
    that competes with Betterment and Wealthfront, just announced a $50
    million fundraising round, led by Canadian financial services firm
    IGM Financial.
  • The company, which manages $8.5 billion, is now valued
    at more than $600 million.


The fintech fundraising frenzy is showing no sign of cooling off
this year
, with robo advisor Personal Capital becoming the
latest company to benefit.

The company said on Tuesday it had raised $50 million in a
Series F fundraising round, led by Canadian financial services firm
IGM Financial. Personal Capital declined to give its valuation but
said it was more than $600 million. 

Personal Capital, which is headquartered in Redwood City,
California, said it will use the new cash to grow its core
financial advisory business, establish new partnerships, and pivot
into areas beyond digital wealth management, according to CEO Jay
Shah.


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“In this year, we’ll use this capital to go deeper into the core
business that we built,” said Shah in an interview. “And when I say
that, I’m referring to the digital wealth management directed at
consumer platform. We’ve seen that this is the direction that the
industry is headed and we’re proud to be leading the way. So we
want to invest more in that growth.”

Going forward, he said the company is planning to establish more
partnerships and launch new financial products. Last April,
Personal Capital announced it is partnering with Alight Solutions,
a healthcare and retirement benefits manager, and investment
manager AB to introduce a platform offering retirement savings
plans for employees. 

Personal Capital, which competes with companies like Betterment
and Wealthfront, offers free services that allow users to connect
all their financial accounts and track them in a dashboard. It also
sells financial planning and wealth management services to high
net-worth investors and pairs them with advisers who can create a
custom investment plan that adapts to the investor’s financial
goals.

Read more:
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Personal Capital manages $8.5 billion of assets for customers.
About 40% of assets the company manages is for accredited
investors, who had an income of $200,000 for each of the past two
years or have a net worth of over $1 million. 

Personal Capital last year was looking to hire a manager
“responsible for providing technical expertise and support for the
SEC filing and compliance related reporting and technical
accounting functions for a pre-IPO company,” which hints that the
company may be gearing
up to go public

“We’re focused on building a strong business and on our growth,
and should we make the decision to go out to the public
marketplace, we want to be in a position to be able to do so,” Shah
said. “But we’ve never made a commitment or decision” to go
public.

The new round brings the company’s total funding to more than
$315 million, including a $40 million line of
credit. 

It’s a hot time for digital wealth management companies to be
raising money. Last week,
Acorns
,
an app that invests users’ spare change in exchange-traded
funds
, announced it raised $105 million in a Series E round
that values the company at $860 million.


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Source: FS – All – Economy – News
Robo advisor Personal Capital just raised million as it gears up for an IPO