Fintech Startup Betterment Raises $70 Million
Consumer robo advisor Betterment announced it has raised $70 million in financing, bringing the company’s current valuation to $800 million. Swedish investment company Kinnevik led the round, with participation from Bessemer Venture Partners, Menlo Ventures, and Francisco Partners.
Betterment is an automated investing service that aims to provide optimized investment returns for individual, IRA, ROTH IRA, and rollover 401(k) accounts. Its technology enables users to create customized, diversified portfolios to manage their investments. Charging a management fee of 0.25 percent, the company’s mobile app enables users to access, view, share, and review their portfolio activities as well as to deposit and withdraw money from anywhere at anytime. Betterments services also include tax loss harvesting, a program that works to offset taxes on both gains and income, and RetireGuide, a series of online surveys that enable users to assess their progress toward long-term financial goals.
Chris Bischoff, senior investment director of Kinnevik
According to the company, during the past 15 months Betterment has grown from managing $4 billion to nearly $10 billion in assets for more than 270,000 customers. Since the company’s last financing round of $100 million in March, 2016, it has launched a series of new product and service innovations, including telephone access to licensed financial experts, advanced tax-efficiency tools, portfolio personalization, and other new features.
“The follow-on investment into Betterment aligns with our strategy of investing over multiple rounds into high-performing technology-enabled companies,” said Chris Bischoff, senior investment director of Kinnevik, which led Betterment’s previous round of $100 million. “Betterment has continued to impress us with its strong growth, customer-centric focus, cutting-edge technology and talented team. After a year of investment, we saw additional opportunities for growth and proposed the financing to Betterment.”
The new financing will enable Betterment to continue aggressively to grow its business and accelerate product development.
