Online wealth adviser Personal Capital is pursuing a dual-track process, seeking a fresh round of funding and a buyer, according to four sources in banking and private equity.
The new round would value Personal Capital at $500 million, sources said. The firm is also seeking $500 million with a potential sale, they said.
The moves come just a little over a year after Personal Capital collected $50 million in a Series D round led by Corsair Capital.
A spokeswoman confirmed that Personal Capital has hired investment bank Evercore Partners Inc to help raise a Series E round, which has just launched. She declined to say how much Personal Capital hopes to raise or comment on a possible sale.
A private equity executive said the company is looking to raise $50 million with the E round.
Personal Capital CEO Bill Harris spent a significant amount of time on the Series D fundraising, the spokeswoman said. “In order to free up that time, [Personal Capital] hired Evercore to manage the process this time around,” the spokeswoman said in an emailed response to question. Harris is the former CEO of Intuit and PayPal.
With offices in San Francisco, Redwood City, California, and Denver, Personal Capital offers an online wealth management platform, including apps, for clients to manage their money. The investment advisor has $187 billion in tracked accounts and 900,000 registered users, according to the Personal Capital website.
To date, Personal Capital has raised $102.3 million over six rounds from 11 investors, according to CrunchBase, which tracks privately backed companies. Besides Corsair, the company’s backers include BBVA Ventures, BlackRock, Crosslink Capital, Institutional Venture Partners, USAA and Venrock, CrunchBase reported.
UPDATE: A Personal Capital spokeswoman said Wednesday that the firm has raised $109 million in funding.
One banker said Personal Capital is more likely to raise another round of funding than sell.
Personal Capital, which has $1.8 billion in assets under management, is seeking a high sale price, sources said. Valuations for so-called “robo advisers” are “out of sight,” a second PE executive said. They pointed to the sale of LearnVest to Northwestern Mutual in March for a reported $250 million. Fidelity Investments also reportedly spent $250 million when it bought eMoney Advisor in February.
The Economist, in its Oct. 31 issue, suggested so-called robo-advisors may be having a tough time. The low-cost of robo-advisors has helped them grow rapidly “to the horror of conventional money-managers,” The Economist said. But AUM growth at the biggest outfits has sagged and with it goes the prospects of the upstarts, the story said.
The online wealth advisory space has grown more competitive. Just last month Personal Capital lowered its account minimum from $100,000 to $25,000 in a bid to attract more customers, the New York Times reported.
A spokesperson for Corsair Capital said: “From time to time there has been market discussion about companies in which Corsair Capital may have an investment and which lead to media inquiries. Corsair Capital’s policy is to not comment on such inquiries. If Corsair Capital has something material to report, it would make the appropriate timely disclosure.”
Executives for USAA, IVP, Venrock, Crosslink and Evercore could not immediately be reached for comment.
Action Item: To contact Personal Capital call 855-855-8005.
Photo of Bill Harris courtesy of Personal Capital