Investment Startup for Tech’s Young Millionaires Now Wants Your Money, Too

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In 2011, Wealthfront started out with a no-brainer concept. A lot of really young people in Silicon Valley were making a lot of money quickly, but they didn’t know what to do with it. Wall Street-style brokerages and investment advisers were on the other side of the country, or at least on the other side of a generational and cultural divide. So Wealthfront came along with an alternative approach to help this newly minted class of hoodie-clad millionaires figure out where to put their many dollars.

Specifically, the company promised an automated approach to portfolio management, a system algorithmically tailored to clients’ financial goals and risk tolerance. With software to manage such esoteric services as tax-loss harvesting and single-stock diversification, Wealthfront portrays itself as a rational, commission-free alternative to high-fee money managers who always run the risk of allowing emotion to impact their trading decisions.

So far, the pitch seems to be working. In two-and-a-half years, Wealthfront CEO Adam Nash says the company has amassed more than $1 billion in client assets. Its service is now part of the benefits package for employees at Google, Palantir, and the San Francisco 49ers (another outfit with a lot of twentysomething millionaires). It has an exclusive program for Twitter and Facebook employees to manage their post-IPO equity.

Schwab for Millennials

But like the Silicon Valley companies it services, Wealthfront has bigger ambitions than this one niche market. On Tuesday, the company announced a new $64 million funding round to transform itself into what Nash describes as Charles Schwab for a new generation.

“The leading edge of this generation has now reached their early 30s, and they have a very different set of priorities than the Baby Boom generation,” Nash says. “While just beginning to earn, save and invest, they are projected to control $7 trillion in liquid assets in less than five years.”

Nash says Wealthfront has raised this new capital despite not spending a cent of the $35 million it raised in its previous round, bringing its total funding to around $100 million. At a time when venture capitalists are wringing their hands about startups spending too much money too quickly, this apparent temperance is unexpected. But the willingness of backers to pour more money into the company anyway also speaks to the hope and expectation of steroidal growth for Valley startups of a certain echelon. If Wealthfront can make good on its pitch and entice a much wider range of clients than the winners of the Silicon Valley startup lottery, the opportunity seems to be there. If the past decade of rising tech wealth has taught Millennials anything, it’s that you don’t need to trust someone wearing a tie to make a lot of money.