US bank Goldman Sachs is investing £45m in robo-advisor Nutmeg alongside existing partners Convoy, which will be put towards international expansion and new products and features.

The expansion of UK-based Nutmeg, which manages assets of £1.5bn, will include a  launch in financial advisory firm Convoy’s home of Hong Kong.

Launched in 2011 as a fintech wealth management solution, Nutmeg added human advisors to its offering last year, rolling out personalised one-to-one investment advice in October.

Nutmeg: start-up to scale-up

Nutmeg is the UK’s largest robo-advice company, with more than 64,000 customers, but is yet to return a profit, registering losses of £12.3m in 2017.

Despite this, the Goldman Sachs-led investment suggests it is seen as a highly lucrative platform, as Martin Stead, Nutmeg’s chief executive, commented: “This is a vote of confidence in our team, investment proposition and track record, and marks Nutmeg’s transition from start-up to scale-up.

“We look forward to Goldman Sachs’ support and to exploring commercial collaboration opportunities that further accelerate our growth plans. This funding also enables us to expand internationally, with our plug-and-play B2B expansion model, which leverages both our technology and investment capabilities, developed in this highly respected FCA-regulated market.”

Goldman Sachs on the march

Goldman Sachs partner, Rana Yared, who will take a seat on Nutmeg’s board, commented: “Nutmeg has already established itself as one of the fastest growing wealth managers in the UK. We are excited to fuel further growth and innovation through our investment and to support management in their vision of leveraging technology to broaden access to world-class investment solutions.”

The bank’s move is another sign of its aggressive investment strategy, coming only months after the UK launch of its retail banking brand Marcus, which offered the highest interest rate of any retail bank in the UK of 1.5%. 

Goldman Sachs is currently around 18 months into a three-year plan to increase its annual revenue by $5bn.