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A generation of flashy startups aimed at helping people with modest savings plan their financial lives shook up the wealth industry after the financial crisis.
But as the pool of wealth across generations has grown in the US in recent years, a new flavor of wealth-management-focused startups is emerging.
These fintechs are looking to capitalize on retail investors’ growing interest in owning private companies, as many buzzy startups are staying private for longer. They are tapping into a mainstream demand for cryptocurrencies. And they are clamoring for partnerships with companies that want to use their tech to provide low-cost financial services to employees as perks.
Insider surveyed 13 investors and analysts about the rising startups specializing in wealth tech to watch as several of the original players like Wealthfront, Nutmeg, and Personal Capital have sold to large firms or, in the case of the early robo-advisor Betterment, raised late-stage rounds.
Respondents selected companies they view as embodying the next generation of the wealth-management industry. Companies are listed in alphabetical order, and we specified when an investor cited a portfolio company.
Cited by: Nyca Partners and Anthemis Group, which are investors in Addition
Total raised: $4.2 million
What it does: Companies use Addition’s services and technology to provide employees with access to Addition’s network of independent financial professionals and digital tools as they have questions about financial decisions, like understanding equity compensation and retirement savings.
Why it’s notable: “Addition is leveling the field by making personalized financial expertise inclusive and accessible,” said Katie Palencsar, managing director at Anthemis.
“Improving employees’ understanding of how equity compensation impacts their overall financial well-being is a huge need right now, especially with so many employees receiving equity as part of their compensation. Addition has the right mix of technology solutions and financial advisors to help people get an accurate picture of their long-term remuneration,” said Hans Morris, managing partner at Nyca Partners.
Cited by: CB Insights
Total raised: $70.3 million
What it does: Alto IRA, based in Nashville, Tennessee, allows users to create a self-directed individual retirement account and invest savings in nontraditional assets like private equity and real estate. CEO Eric Satz founded the company and launched it in 2018.
Why it’s notable: “Alto IRA brings a new approach to alternative-asset investing by combining retirement planning with investments in high-growth, nontraditional assets such as private equity, venture capital, real estate, art, and crypto,” said Elif Yayla, a senior fintech analyst at CB Insights, adding that the retirement-account market is “antiquated and ripe for disruption.”
Cited by: Canapi Ventures, an investor in Capitalize
Total raised: $15 million
What it does: Capitalize is aiming to help people consolidate or roll over their 401(k) accounts, a process that can be cumbersome and rely on paper to complete. The company is based in New York and launched in 2020.
Why it’s notable: The company is “filling an unmet, critical market need as the first online marketplace for consumers to roll over and consolidate legacy retirement accounts,” said Jeff Reitman, a partner at Canapi Ventures.
Cited by: Obvious Ventures
Total raised: $37 million
What it does: Compound is a wealth-management firm with advisors catering to people working in the technology industry , who often hold equity in their startup employers and can have complex financial situations.
Why it’s notable: “Dealing with personal wealth really is one of those unspoken markets where people often must enter this black box to try and figure out for themselves how to optimize their assets, plan for the future, and save money,” said Chris Cheng, a senior associate at Obvious Ventures.
“Compound gives users the personalized wealth-management support and tools that aren’t available to people today, beyond the ultrarich, and empowers users to take control of their financial well-being,” Cheng said.
Cited by: XYZ Ventures, an investor in Daffy
Total raised: $22 million
What it does: Daffy’s app offers a way for users to automate charitable donations through a tax-exempt donor-advised fund. Adam Nash, the veteran Silicon Valley executive and former chief executive of Wealthfront, cofounded Daffy with Alejandro Crosa and launched in 2021.
Why it’s notable: “Daffy takes many of the same great innovations we’ve seen in fintech to a very worthy space: charitable giving,” said Ross Fubini, a managing partner at XYZ Ventures. “Within seconds, you can donate to your favorite causes and charities from anywhere.”
Cited by: FTV Capital, an investor in Docupace
Total raised: FTV Capital has invested about $75 million in Docupace. A representative for Docupace declined to comment on the company’s overall funding.
What it does: Docupace operates a digital platform with tools for wealth managers looking to automate their traditional back-office operations like opening client accounts, managing financial advisors’ compensation, and storing documents.
Why it’s notable: “The wealth-management industry has made noteworthy strides to adopt technology, but advisors by and large still rely on inefficient, manual, paper-based workflows to run their back offices,” said Robert Anderson, a partner at FTV Capital, adding that Docupace’s secure platform meant to automate back-office operations addresses these problems.
Cited by: Bessemer Venture Partners, an investor in Farther
Total raised: $7 million
What it does: Farther is a fee-only wealth-advisory startup that provides its financial advisors with proprietary technology in order to manage clients’ investments. New York-based Farther employs about 20 advisors and caters to wealthy professionals.
Why it’s notable: “Farther is a first-of-its-kind wealth-management platform combining the benefits of modern technology with the expertise and guidance of traditional wealth management,” said Charles Birnbaum, a partner at Bessemer Venture Partners.
Cited by: Felicis Ventures, an investor in Origin
Total raised: $68 million
What it does: Origin provides financial-planning services and tools to corporate clients aimed at helping employees plan and manage aspects of their personal finances, like benefits and compensation.
Why it’s notable: “Origin is the first comprehensive employee financial-wellness platform for the modern workforce. Their platform helps employees manage compensation, benefits, and personal finances — side by side with financial professionals,” said Niki Pezeshki, a general partner at Felicis Ventures, who added that some of Origin’s clients include the website creation company Webflow and Udemy, the online course provider.
Cited by: Index Ventures, an investor in Savvy
Total raised: Savvy declined to disclose total funds raised to date.
What it does: Savvy is a newly formed wealth-management firm that plans to acquire existing registered investment advisors (RIAs) and wealth managers, bringing their books of business to the company. Savvy will provide proprietary software that advisors and their clients will use to manage their finances.
Why it’s notable: “Many customers still want a human point of contact when it comes to personal finances, but there’s a huge brand and automation opportunity for these advisors that has gone untapped. Savvy strikes the right balance between human and tech — it’s a modern solution built for the next generation,” said Mark Goldberg, a partner at Index Ventures.
Cited by: Harlem Capital, an investor in Staax
Total raised: $1.6 million
What it does: Staax operates an app with a social feed that allows users to send and receive stocks, exchange-traded funds, or fractional shares among one another.
Why it’s notable: “Unlike competitors, Staax allows users to quickly send fractional shares or cash with zero fees, no paperwork, and access to a social feed, while earning interest on cash balance,” said Jarrid Tingle, managing partner at Harlem Capital.
Cited by: Bain Capital Ventures and PitchBook
Total raised: $75 million
What it does: Titan is a registered investment advisor and automated-investing startup that allows retail investors to invest in portfolios that the firm actively manages.
Why it’s notable: “Unlike mutual fund platforms of the past, Titan’s products have a direct-to-consumer engagement model, are faster and cheaper to create, and are seeking to offer a fuller menu, including alternative asset classes like crypto,” said Matt Harris, a partner at Bain Capital Ventures, who added that Titan is “building Fidelity for new generations.”
“The company is open and transparent in its investment strategies, adding transparency to a historically opaque industry,” said Robert Le, a senior analyst at PitchBook.
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