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Personal Capital Secures $25 Million Financing; BlackRock, Crosslink Join Investors
Personal Capital, the online wealth management service, has closed a $25 million round of financing, bringing in BlackRock and Crosslink Capital as investors. Existing investors Institutional Venture Partners and Venrock also participated in the series C financing.
The Silicon Valley-based firm is planning to use the funding to ramp up its staff base and grow its business.
The firm’s CEO is Bill Harris, former CEO of PayPal, and he views Personal Capital as “the culmination” of his career, according to Kyle Ryan, executive vice president, who spoke to Family Wealth Report last year.
Harris told VentureBeat the goal for the company is to help the “forgotten middle [class]” get a comprehensive view of their spending. “The biggest problem is fragmentation,” he said. “For most of us, our money is completely scattered.”
And by revolutionizing the offering available to the lower end of the wealth management market, firms such as Personal Capital are arguably changing the game at the higher end of the market, by increasing the importance of value-added services.
Personal Capital’s offering is a free dashboard that compiles all an investor’s accounts - including bank, investment and credit accounts – as well as bills, to give a complete picture of his or her financial picture.
The technology monitors all transactions passed through Personal Capital’s system to add up these costs – such as mutual fund fees – to the investor. It also allows people to track their spending and monitor it by category.
This is the free part of the service, while Personal Capital’s business model is based around developing some of these relationships into advisory relationships, similar to a more traditional wealth management model - but with communication delivered purely though electronic means. Again, this resonates with the higher end of the market, where companies are increasingly embracing video technology and tools like Skype and Facetime to communicate with clients.
Crosslink Capital’s Jim Feuille has joined the firm’s board of directors.
