Wealthtech funding drops 21% to $4.4 billion in Q2

Wealthtech funding lagged during the second quarter after a strong start to the year, according to CB Insights’ latest State of Fintech report. 

Funding in wealthtech fell by 21% quarter over quarter to $4.4 billion, while deal activity grew slightly to 88 deals. By comparison, funding reached a record $5.6 billion during the first quarter across a total of 86 wealthtech deals that took place. Still, total wealthtech funding this year has well outpaced 2020’s year-end total funding of $5.2 billion. 

Despite the slump, 12 wealthtechs raised more than $100 million in mega-rounds that drove the majority of the funding (77%) during the second quarter. Robinhood typically led these mega-rounds in past quarters, but instead made its long-awaited public debut after a wild year for the startup leaving room for other wealthtechs to lead in funding. 

Addepar, a cloud-based software used by wirehouses like Morgan Stanley and registered investment advisers to track and analyze portfolios, announced a $150 million mega round in June that propelled its valuation to $2.17 billion

Alternative investment platform YieldStreet also announced a mega round of $100 million as the popularity of alternative assets rises. YieldStreet is a fintech company that opens access to investment products across a range of asset classes that were previously unattainable for the everyday investor. 

Other notable alternative investing platforms that raised money during the second quarter include a $13 million round for Rally, a platform that securitizes unique, high-value assets and offers shares as equity investments to users of all income levels. Starstock raised $8 million to grow its marketplace for sports card hobbyists.

Rocket Dollar, a wealthtech company that allows users to invest in non-traditional assets like startups, peer-to-peer lending, small businesses and real estate, raised $100,000 backed by investments from Envestnet Yodlee Launchpad and Onramp Insurance Accelerator

Outside of alternatives, Germany-based wealthtech platforms raised mega-rounds from global investors. Trade Republic, a mobile-only and commission-free broker that offers extended trading hours, raised $900 million pushing its valuation to $5.3 billion. Scalable Capital, an online wealth manager and neobroker that helps users with long-term systematic wealth creation raised $183 million pushing it to unicorn status with a $1.4 billion valuation. 

The SPAC craze within the wealth management space also continued during the quarter, the report noted.

Following the recent mergers of MoneyLion, eToro, and SoFi, celebrity-backed robo-adviser Acorns announced it would merge with Pioneer Merger Corp., which is set to value the combined company at $2.2 billion, in late May. The startup will trade on the Nasdaq under the symbol “OAKS” after the deal closes, which is expected to happen in the second half of 2021. 

The post Wealthtech funding drops 21% to $4.4 billion in Q2 appeared first on InvestmentNews.

Andrew is half-human, half-gamer. He’s also a science fiction author writing for BleeBot.

Andrew Vincent
Andrew is half-human, half-gamer. He's also a science fiction author writing for BleeBot.
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