Banking On Fintech: Where Incumbents Are Making Investments In Wealth Tech

Recognizing wealth tech companies as a viable threat, many incumbents in the banking industry have begun to partner with wealth tech companies and make investments in these startups.

We used CB Insights’ Business Social Graph (BSG) to visualize the incumbent international banking firms that are making investments in wealth tech.

We define wealth tech to include fintech companies that offer an alternative to traditional wealth management firms and technology-enabled tools that are advancing the investment and wealth management profession. This includes full-service brokerage alternatives, automated and semi-automated robo-advisors, self-service investment platforms, asset class specific marketplaces, and tools for both individual investors and advisors to keep up with the changing dynamics in wealth management.

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Key takeaways:

• Since 2012, several banks and wealth management firms have made co-invests in wealth tech. For instance, Goldman Sachs and JP Morgan Chase are co-investors in Motif, Northwestern Mutual and Citi Ventures are co-invested in Betterment, and UBS and Santander InnoVentures are co-investors in SigFig.
• Incumbents have made the most investments to companies that fall into our robo-advisors category, including Betterment, Motif, Personal Capital, WealthNavi, Folio, ForwardLane, and SigFig

• Blackrock invested in Personal Capital, the second most well-funded wealth tech company with approximately $207M in funding.
• Deals outside the US, went to Japan-based robo-advisors WealthNavi and Folio.
• The largest investment that included incumbent participation was a $100 Series E investment to Betterment that included Citi Ventures among other investors.
• Northwestern Mutual, which previously invested in LearnVest, acquired the company in Q1’15 in a deal that valued the company at $250M.
• LearnVest is the only featured company on our map to have exited.

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