Let’s get within the weeds about fintech AUM

UBS and Wealthfront final week referred to as off a planned deal to sell the robo-adviser startup to the financial giant for $1.4 billion. As a substitute, UBS invested $69.7 million within the firm at a valuation that Wealthfront described as $1.4 billion.

In its note discussing the tip of the transaction and its newest fundraise, Wealthfront shared some helpful details about its monetary well being, together with that it’s going to quickly cease consuming money to function.

Why will we care a couple of transaction that did not consummate? Data. Wealthfront’s notes on its monetary outcomes, crossed with its freshly affirmed valuation and what we all know from exterior sources about its belongings beneath administration, present an attention-grabbing window into what fintech firms could also be price right this moment — and which is perhaps overvalued.

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Through the 2020-2021 peak of the final enterprise cycle’s startup arc, we noticed fintech firms using excessive when it comes to funding attracted, valuation earned, and, to a associated diploma, client curiosity noticed. However as we’ve got seen within the outcomes of main buying and selling platforms like Coinbase and Robinhood, there was a softening in demand for investing merchandise amongst shoppers; given the widely lackluster lilt of the economic system right this moment, this isn’t a staggering shock.

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