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SoftBank-Backed DriveWealth Gets Insight, Accel Funding – WealthTech Digest #53

Key takeaways

✅ SoftBank-Backed DriveWealth Gets Insight, Accel Funding

For our first digest today, DriveWealth secures more venture funding to officially reach a valuation of $2.85 billion. DriveWealth is a financial technology company that helps companies build competitors to Robinhood Markets Inc. Recently, the company announced it has raised $450 million in a funding round at a sharply elevated valuation from a year ago. The round values the company at about $2.85 billion and will be led by Insight Partners and Accel. SoftBank Group Corp.’s Vision Fund participated in the round, alongside Greyhound Capital and Citigroup Inc.’s Citi Ventures arm. In addition, existing investors Fidelity International and Steven Cohen’s Point72 Asset Management’s venture arm. According to people familiar with the situation, investors are also attempting to buy $300 million in secondary shares from existing shareholders. DriveWealth’s valuation is up from about $200 million last year, one of the people said. Point72 owns about 15% of the company. DriveWealth provides technology that lets businesses such as Revolut and Square Inc.’s Cash app offer fractional trading. This has been a trend that was popularized by the newly public brokerage firm Robinhood. On the matter, CEO Robert Cortright said “It’s never been possible for someone in India to buy $20 worth of Amazon with a flick of a finger”. He added, “A lot of people want to replicate the Robinhood model”. The advantage of DriveWealth is that it serves companies instead of Robinhood’s consumer-facing business model. The good news for the VCs backing the company is that the company intends to go public fairly soon.

✅ Survey Of North American Investors Reveals Age-Related Insights

Despite the wealth industry’s strides over the past year in providing tech-enabled advice to clients, younger North American investors want more. More specifically, this age group is expecting more diversified offerings and more personalized services. In a new report titled The New State of Advice, Accenture drew from a survey of 1,000 advised investors across the U.S. and Canada. The study sample comprised adults from 20 to 93 years old, ranging in personal wealth from less than US$250,000 to US$10 million and above. The findings of the survey suggest that advisors may still need to improve when it comes to providing appropriate advice and products just when investors need them. A slight majority (55%) of respondents indicated that the advice they get is too generic. Not only that, another 55% of participants believe they could do better by investing on their own. Out of all those polled, 79% said they expect their investment advisor to also offer banking and insurance products. That number rose among Gen Xers (85%), Millennials (91%), and Gen Zers (97%), compared to less than half (47%) of Baby Boomers. Among these younger investors, 6 in 10 investors overall (59%) said they’ve asked their advisors about ESG or socially responsible investments. The conclusion is clear, advisors who want to manage more of their clients’ assets must offer diversification and customization, the survey findings suggest.

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