Today we're announcing that we've raised $50 million in Series D funding. That capital brings our total funding to $109 million.
The funding was led by Corsair Capital, a highly regarded private equity firm focused on financial services, as well as BBVA Ventures and USAA. Personal Capital’s existing venture investors – IVP, Venrock and Crosslink – also participated in the round.
With over $30 trillion in investable assets in American households, the future of financial advisory is expansive. Yet, it’s characterized by conflicts of interest, lack of access to unbiased advice, distrust and inertia. What’s worse, the shift from pensions to 401ks – with no increase in financial education – has left Americans facing a whopping $14 trillion retirement shortfall.
At Personal Capital, we intend to reverse all of that. Our mission is simple: better financial lives through technology and people.
Our service combines high tech with high touch: award-winning apps transform the way people understand their money. Clients work one-on-one with real, human advisors to develop and implement long-term investing strategies. All at half the cost of a traditional advisor. Hint: Our advisors talk to you on the phone and we don’t pay for mahogany desks. We also utilize efficient investing vehicles and a formidable algorithm.
Our fundraise will help us to better deliver on our mission by increasing our marketing outreach, expanding our advisory service and continuing to improve our technology. With our mission to improve financial lives, we’re also exploring expanding beyond just investment management.
How Technology Can Deliver Better Advice
Our ground-breaking technology enables us to enhance the value proposition of a financial advisory service in three key ways:
- Deep data. Our apps allow users to link any electronic financial account to get one-click analytics and insights into their portfolio. This data gives you an unprecedented understanding of your finances and enables our advisors to offer truly personalized advice.
- Automation. Where it makes sense, we’ve built automated processes to help enhance the efficiency of the business. Examples are re-balancing and tax-loss harvesting, which can lead to a significant boost in after-tax returns.
- Scalable systems. Our clean IT infrastructure enables us to build an efficient and scalable business that ultimately enables us to focus on the client and offer high-touch, personalized service at a much lower investment minimum.
We truly take the best of tech and the best of financial services. We’re thrilled that Americans are using our free intuitive software to live better financial live because they know where they stand and have access to advice to get where they want to be.
What Our Growth Looks Like
Our service starts with our free software. Now, over 650,000 American households track over $100 billion of their money using the Personal Capital dashboard. A year ago, that figure was less than $50 billion. Over the same period of time, our assets under management have grown from $250 million to over $800 million. We’ve doubled our app usage, and more than doubled our conversions to clients.
The average age of an active Personal Capital dashboard user is 37 years old. Users span from twenty-somethings to octogenarians. Our client base skews older, with our average client at 44. We looked at how the age of our clients compares to the US population (specifically: if 20% of our clients are 30-somethings, how does that compare to the % of the US population that is 30-something?).
Here’s what’s behind our growth: Our apps are holistic, easy to use and beautiful. Users link their accounts to see their entire financial picture in one place: savings accounts, credit cards, investments and loans. Users can track key metrics like net worth, cash flow, savings rate and asset allocation. Our stock option calculator helps users understand the value of their stock options in the context of their wealth and the Investment Checkup enable users to see if their portfolio could do better with re-balancing. Access to comprehensive financial data and one-click analytics empower our users to make better financial decisions.
A look through our iTunes App Store and Google Play reviews tells the story better than we can. One user said “Excellent if you like to check all your accounts in one place to track your wealth.” Another said “Personal Capital is a spectacular tool for monitoring portfolio allocations and balances. I use it to make sure that my investments are allocated appropriately across all of my different accounts.” And a third stated, “It’s everything I need.”