Market Overview

Robo-Advisor Tech Startup SigFig Raises $50M From Top Wall Street, Silicon Valley Investors

Robo-Advisor Tech Startup SigFig Raises $50M From Top Wall Street, Silicon Valley Investors

A unique robo-advisor business model received a stamp of approval from investors on both coasts.

SigFig announced a $50 million Series E round anchored by Bain Capital, Union Square Ventures, DCM Ventures, UBS and New York Life.

Why It Matters

SigFig, unlike other robo-advisors like Betterment and Wealthfront, builds digital wealth management tools for financial institutions rather than manage investments itself. The company counts Wells Fargo & Co (NYSE: WFC), UBS Group (NYSE: UBS) and Citizens Financial Group Inc (NYSE: CFG) as customers. SigFig plans to use the new capital infusion to grow its financial institution customer base.

“We are now aggressively expanding our services and reach to improve how banks utilize technology with their clients and increase the number of everyday people using technology to manage their finances,” said CEO Mike Sha in a press release.

What’s Next

“Traditional” robo-advisors have started to adapt their business models. Wealthfront, for instance, has added what it calls a “PassivePlus” suite of products, which blend passive investing with more active strategies such as the option to invest in a “risk parity” fund. Betterment, the other market leader in robo-advising, added human advisors to its offerings a year and a half ago.

SigFig’s white labeled business model shows that investors still see significant promise in the robo-advising space, and are deploying capital to support different methods of approaching the market.

“The media likes to put this idea out that the robo-advisors are out to put the traditional advisors out of business,” Sha said at the 2018 Benzinga Global Fintech Awards. “We see something completely different with most of our advisors.”

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