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November 17, 2021

US robo-adviser Wealthfront explores $1.5bn sale

By Verdict Staff

California-headquartered robo-advisory platform Wealthfront is reportedly mulling business divestment at a valuation of around $1.5bn.

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  • The report analyzes the APAC wealth and retail savings and investments markets. This includes affluent market size, both by number of individuals and the value of their liquid assets.
  • The affluent population grew by 5.3% in 2021 and is expected to grow at an AAGR of 4.8% between 2022 and 2026.
  • The value of liquid assets held by the affluent segment surged by 8.4% in 2021, backed by economic recovery. HNW individuals’ financial wealth grew by 12%, while mass affluent individuals’ wealth grew by 6.0%.
  • The report provides an analysis of factors driving liquid asset growth. It is also split into asset classes - equities, mutual funds, deposits, and bonds.
  • The affluent population are more risk-tolerant and invest a significant proportion of their investments in risky assets such as equities, compared to emerging affluent and mass market individuals.
The report also provides data and insights on the size of offshore holding of HNW investors in the APAC region.
by GlobalData
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The firm has hired a financial adviser to explore the options for sale, Bloomberg reported citing people familiar of the development.

According to the sources, Wealthfront’s potential buyers include banks and special purpose acquisition companies.

They also added that the robo-adviser is yet to finalise its decision on the sale and could choose to stay independent.

Wealthfront did not comment on the news.

Founded in 2008 by Andy Rachleff and Dan Carroll, Wealthfront provides financial planning, and investment management via its platform.

The firm, which also offers banking-related services, recently expanded into other financial services such as cash accounts and payments services.

According to its website, the company has around 450,000 users on its platform.

In 2018, it raised $75m in a funding round led by New York-based investment firm Tiger Global Management.

This financing round, backed by investors including Benchmark Capital, DAG Ventures, and Index Ventures among others, valued the firm at $500m.

Robo-advisers, which charge low fees and make algorithm-driven trading decisions, have overhauled the traditional asset and wealth management space.

Some of the traditional players, who largely use their expertise to manage wealth, have not forayed into robo-advisory to keep up with the race. These include investment giants such as Charles Schwab and brokerages including Morgan Stanley.

Latest moves by other robo-advisers

Last month, Korean robo-adviser Fount closed a $33.4m Series C round to fund the further development of its machine learning-based platform and the hiring of new resources.

In May this year, Canadian robo-adviser Wealthsimple has raised $610m (C$750m) in a funding round, taking its valuation to $4bn (C$5bn).

In April, Singaporean robo-adviser StashAway expanded its presence to Hong Kong following its entry to the UAE market in November last year.

Free Report
img

Analyze opportunies within the wealth management market in APAC

GlobalData’s ‘Asia-Pacific Wealth Management: Market Sizing and Opportunities to 2026’ report provides a comprehensive overview of the Asia-Pacific (APAC) wealth management market.
  • The report analyzes the APAC wealth and retail savings and investments markets. This includes affluent market size, both by number of individuals and the value of their liquid assets.
  • The affluent population grew by 5.3% in 2021 and is expected to grow at an AAGR of 4.8% between 2022 and 2026.
  • The value of liquid assets held by the affluent segment surged by 8.4% in 2021, backed by economic recovery. HNW individuals’ financial wealth grew by 12%, while mass affluent individuals’ wealth grew by 6.0%.
  • The report provides an analysis of factors driving liquid asset growth. It is also split into asset classes - equities, mutual funds, deposits, and bonds.
  • The affluent population are more risk-tolerant and invest a significant proportion of their investments in risky assets such as equities, compared to emerging affluent and mass market individuals.
The report also provides data and insights on the size of offshore holding of HNW investors in the APAC region.
by GlobalData
Enter your details here to receive your free Report.

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