Robo-Advisor: Automated Wealth Management Platform M1 Finance Raises $33 Million Series B

Chicago based M1 Finance, an automated money management platform has raised $33 million in a Series B funding round. The r0und was led by LeftLaneCapital with participation from Jump Capital, Clocktower Technology Ventures as well as existing M1 investors, according to a release. M1 has previously raised $21.5 million.

In February, the fintech reports becoming one of a few startups to reach $1 billion in customer assets under management. During the first part of 2020, M1 has and added over $650 million in customer deposits. In a blog post, the company claimed that over 70% of their users find M1 by word of mouth.

In May, M1 reported that it had experienced a 135% year over year new account increases in Q1 2020 vs. Q1 2019. M1 added that they saw a 200% increase in new account openings in March 2020 vs. 2019 (50,784 vs. 16,910).

Brian Barnes, M1 Finance founder and CEO, said their clients are intelligent, self-directed investors seeking long term, sustainable wealth:

“We want that to be as easy and automated as possible, while still letting our clients maintain the control they desire. With M1, you can build an entire wealth strategy in only a few clicks, down to individual stocks and ETFs. We take it from there, handling all the day-to-day optimization, rebalancing, and re-investing according to your instructions so you can spend more time building strategies and less time executing them.”

Barnes claims they have built the “premier personal finance platform that combines the best of digital investing, borrowing, and banking.” This has been accomplished using relatively little funding. Barnes said this is a testament to the team and culture M1 has created.

“We’re just getting started and look forward to accelerating our growth with this new funding and strong new partners.”

M1 provides a holistic platform with three integrated tools supporting both long term objectives and near term spending needs. These tools are:

  • M1 Invest is a free investing product that enables users to create fully customizable stock and ETF portfolios using fractional shares and advanced automation.
  • M1 Borrow provides investors with an easy and flexible portfolio line of credit, with rates between 2.00% for M1 Plus subscribers and a 3.50% base rate.
  • M1 Spend provides users an FDIC-insured digital checking account and a debit card, with an available 1.00% APY* and 1% cash-back on qualified purchases

Dan Ahrens, Partner at Left Lane Capital, said both the tech and team are standouts in the Fintech ecosystem:

“Consumers are highly selective when choosing an investing platform. The fact that M1 has reached this scale organically, relying mostly on word-of-mouth to grow rather than paid marketing, shows the strength of M1’s product and client relationships. We are grateful to be involved with such an exceptional team and support them in their journey.”

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