The news: The US-based digital wealth manager has raised $160 million in funding through a $60 million Series F and a $100 million credit facility, surpassing the unicorn milestone with a $1.3 billion valuation, per Finextra.
How we got here: Founded in 2008, Betterment has seen its assets under management (AUM) growth accelerate over the past year:
Over the past year, Betterment’s growth has been fueled by increasing consumer adoption of robo-advisory services, the success of its newer products, and its takeover of its rival Wealthsimple’s US client book.
What’s next for Betterment? As growth through new account holders tapers off for US robo-advisors, Betterment will likely funnel funding toward differentiating its services.
US digital wealth managers won’t be able to rely as heavily on substantial new user growth to power client acquisition, adding further pressure to an increasingly competitive market.
To stand out from the pack and continue to add new clients, digital wealth managers will need to differentiate their services. In this vein, we expect Betterment will follow the lead of competitors Wealthfrontand MoneyLion and push for crypto investing options. Consumers’ interest in the digital asset class is spiking and approval of crypto ETFs by US regulators will likely follow.