Betterment’s Valuation Up $100M Despite Crowded Field
While robo-advice pioneer Betterment faces increasing competition from established firms and more fintech startups, its investors have just boosted the firm’s valuation by $100 million, Bloomberg reports.
In a new round of funding existing investors injected $70 million more into the firm, which brings Betterment’s valuation to $800 million, according to the newswire. The last round of funding in 2016 valued the firm at $700 million, Bloomberg writes. Since the last round, Betterment’s assets under management have grown from $4 billion to $10 billion today, Jon Stein, Betterment’s co-founder and CEO, tells the news service.
The investment comes as Betterment faces an ever-growing field of rivals. Many large financial services firms, including Vanguard, BlackRock and Charles Schwab, have rolled out digital or hybrid advice platforms, the newswire writes.
Stein tells Bloomberg that because of the competition, the new funding is aimed in part at building up the human side of his company. Earlier this year, Betterment began offering a hybrid platform, which gives its clients some access to human financial advisors. Stein also tells Bloomberg he still hopes to take the company public, despite the markets' recent punishing of fintech firms.
Stein told the web publication his firm is better aligned to bring on new clients than his legacy firm rivals in light of the Department of Labor’s fiduciary rule, which purports to require retirement account advisors to put clients’ interests first and went into partial effect last month.