FinTech: Robo-Advisor App M1 Finance Charts Torrid Growth

September 14, 2020 | FinTech, News
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The automated money management platform surpassed the $2 billion mark in assets.

M1 Finance, which calls itself the “Finance Super App,” announced September 9 that it had achieved the $2 billion landmark in assets managed on its platform. It did this within just six months after hitting the $1 billion asset mark in late February 2020. (Chicago Business Journals)

It also said it added 229,000 new brokerage accounts since that time – solid growth of 83%. M1 Finance has intelligent tools on its platforms. These allow investors to create customized portfolios, borrow against those portfolios, and route these transactions through a checking account. It charges no commissions or management fees.

“Self-directed investors who want to build wealth over the long term are hungry for a finance ‘super app’ like M1,” said M1 Finance CEO Brian Barnes. “We give investors complete control of managing their money in one place while leaving it to our technology to take care of the tough work like portfolio balancing, reinvesting, and money movement.”

M1 Finance: June funding proves propitious

M1 Finance last raised capital of $33 million in June in a Series B round led by Left Lane Capital. Jump Capital and Clocktower Technology Ventures also participated.

The funding round brought M1’s cumulative funding to $54 million.

According to Chicago Inno, the total amount raised by M1 is far less than some of it’s biggest peers, such as Betterment, Wealthfront, Acorns and Stash. The latter firms have raised capital north of $200 million.

M1 also said in a release that it reached both the $1 billion and $2 billion AUM thresholds faster “than any of its fintech peers, like Wealthfront, Betterment and Acorns.”

Word of mouth

Moreover, M1 said it achieved its rapid growth on a marketing budget that was “a small fraction of its competitors.”

It attributed this to strong word of mouth from its user base.

“Our record number of account signups and net inflows on M1 is evidence that our platform is solving financial challenges for people, so much so they want to talk about it with their families and friends,” said Barnes. “Investors are tired of the work required to manage their money across many apps and banking providers, and they are desperate for an app that combines investing, borrowing, and banking in one.”

Related Story:   Robinhood, the Fee-Free Trading App, Raises $320M At $8.6B Valuation

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