At Wealthfront we aspire to optimize and automate all your personal finances so you can focus on what matters most — your life. This past year we made significant progress towards achieving this goal by adding financial planning and banking related services to our already compelling investment management services. But we still have a lot of investments to make to achieve our vision. That’s why I’m thrilled to announce a $75 million financing led by Tiger Global Management with participation from our existing investors, Benchmark Capital, DAG Ventures, Greylock Partners, Index Ventures, Ribbit Capital, Social Capital and Spark Capital.
Tiger Global invested because they, like us, believe our exclusively software-based approach is the only way to revolutionize the financial service industry and build a sustainable business. We are raising capital from a like minded venture investor like Tiger Global and not a traditional financial institution so we can continue our goal of offering new financial services for either lower cost or higher value than can be found elsewhere. We specifically want to buck industry norms and not nickel and dime you with fees and charges that we see from other financial institutions. That’s not the kind of business we want to run.
The good news is the financing will help us pursue an even more aggressive push into software-based financial planning and financial services. It will also allow us to accelerate our investment in our brokerage infrastructure which should enable us to build and launch new services even more quickly than the accelerated rate at which we did in 2017.
Early last year we introduced our automated financial planning solution because we believed there had to be a better way to plan for your most important milestones. We wanted to eliminate those complicated spreadsheets you might have attempted on your own or the visit to a stuffy financial planner’s office. We started with retirement planning because there really aren’t any great options to forecast your financial future outside of basic “retirement calculators” that require a lot of guesswork. Even traditional advisors require you to do a lot of hunting and gathering before you meet with them. Our team of PhDs identified third party financial data that can be combined with information from your financial accounts to make it easy to learn what’s financially possible both today and tomorrow with just a few taps on your phone.
The goal was to build an interactive planning experience so you can explore new scenarios in an instant. Our financial planning is built on the premise that you can “play to learn.” In other words, we tell you what’s possible given your current spending habits and savings balance, then allow you to “play” with our assumptions so you can visualize what’s possible. For instance, with a quick tap in the app you can see what it may take for you to retire at 55 versus 60, or how your child’s financial aid can differ at public versus private universities.
But we also believe our financial planning will be your golden ticket to full optimization and automation of all of your finances. Over time you will see us move from just allowing you to play to providing you with advice that optimizes your next steps. We’ll not only recommend what you should do, but we will also automate the implementation of your ideal plan. We’ll even offer the banking and financial services you need to execute the plan, as we plan to make Wealthfront your one-stop solution for all your financial needs. Naturally, our version of these services won’t require paperwork or come with the hassle of the alternatives. And through software and automation, we will be able to offer these services at much lower cost, meaning we’ll be able to deliver you superior economics.
Tiger Global’s investment in us means we can invest more in you, and we couldn’t be more excited for what’s to come in 2018.
Path is a sophisticated personal finance model offered by Wealthfront that allows Clients to explore projections of various possible financial outcomes based on the latest data from their linked financial accounts, tolerance for risk, and current investments, as well as assumptions compiled by Wealthfront’s Research team.
Nothing in this communication should be construed as an offer, recommendation, or solicitation to buy or sell any security. Wealthfront’s financial advisory services, provided to investors who become Clients pursuant to a written agreement, are designed to aid our Clients in preparing for their financial futures and allow them to personalize their assumptions for their portfolios. Additionally, Wealthfront and its affiliates do not provide tax advice and investors are encouraged to consult with their personal tax advisors.
All investing involves risk, including the possible loss of money you invest, and past performance does not guarantee future performance. Wealthfront and its affiliates rely on information from various sources believed to be reliable, including clients and third parties, but cannot guarantee the accuracy and completeness of that information.
About the author(s)
Andy Rachleff is Wealthfront's co-founder and Executive Chairman. He serves as a member of the board of trustees and chairman of the endowment investment committee for University of Pennsylvania and as a member of the faculty at Stanford Graduate School of Business, where he teaches courses on technology entrepreneurship. Prior to Wealthfront, Andy co-founded and was general partner of Benchmark Capital, where he was responsible for investing in a number of successful companies including Equinix, Juniper Networks, and Opsware. He also spent ten years as a general partner with Merrill, Pickard, Anderson & Eyre (MPAE). Andy earned his BS from University of Pennsylvania and his MBA from Stanford Graduate School of Business. View all posts by Andy Rachleff