Wealthtech provider Envestnet now has an ownership stake in women-focused automated mentoring platform Ellevest, according to regulatory filings published over the weekend. The investment did not give publicly traded Envestnet a controlling stake in the six-year-old privately owned Ellevest, which will continue to be operated by co-founder and CEO Sallie Krawcheck. The filing also indicated that Bank of Montreal had taken an ownership stake in the firm.
“As part of our mission to support advisors and their clients with solutions, intelligence and technology to achieve an intelligent financial life, we are looking forward to partnering with Ellevest to further enhance our ever-changing financial wellness ecosystem.” We’re excited for you,” said Rich Anser, Investnet’s chief strategy officer. “We all believe in supporting underrepresented markets and Elvest’s work to empower women is a great complement to our goals and values.”
Envestnet’s “Partnership” includes coaching for Ellevest users. According to materials on the firm’s website, Ellevest is providing access to executive coaching and financial planning packages affiliated with Envestnet. Ellevest is selling Envestnet-affiliated executive coaching for up to $2,499.00 for six seasons of coaching, while a financial plan is being offered for up to $1,999.20 for two seasons of planning.
In November 2020, Allianz Life Insurance Company of North America announced its own investment of $7.5 million in Ellevest, part of a $12.3 million expansion of Ellevest’s Series A financing round. In the first part of Series A, which closed in March 2019, Elevest raised $33 million. Investors included Salesforce Ventures and Morningstar. As of November 2020, the firm has raised a total of $92 million in funding.
Envestnet did not address the size of its investments or additional expectations about it, including whether the firm would have any control over the direction of the firm. Ellevest did not return a request for comment.
This is not the first investment that Envestnet has made in automated advice. In 2015 the firm purchased a platform with ties to Upside, Ritholtz Wealth Management, for an undisclosed amount. The acquisition was called “a perfect match” by Upside co-founder Juni Haim at the time.
Last year, Envestnet bought Harvest Savings & Wealth Technologies, an automated goal-based microsavings platform. The deal, for an undisclosed amount, was intended to strengthen Envestnet’s “financial wellness” ecosystem, according to the company’s press release.
Envestnet described both deals as beneficial to advisors and said they were designed to help advisors compete with software-based automated advice providers.
Ellevest now has more than $1 billion in AUM, filings indicate it has 110,300 accounts and 125 high-net-worth clients. Three years ago, Ellevest had only $283 million in AUM. It was adding new investors, such as PayPal, former executive chairman of Google and Alphabet, Eric Schmidt, and Valerie Jarrett, former adviser to President Obama and author. find my voice,
So far, Ellevest has managed to evade the captives that have hit competitors like the hedged and female-focused WorthFM. Since 2019, the firm has focused on financial education, growing its user base, improving its technology, and expanding its product ranges.