Reported by Jonathan Ponciano and Hank Tucker
Looming interest rate hikes, Russia’s war on Ukraine and spiking inflation have wreaked havoc on the stock market this year, but these four investing fintechs have picked up millions of customers and billions of dollars in assets despite the turmoil.
The explosive popularity of alternative investments has fueled staggering growth for New York City-based iCapital, which returns to Forbes‘ Fintech 50 for the fifth-straight year after nabbing $500 million from investors in 2021. The platform helps financial advisors and legacy institutions like UBS and BlackRock diversify their wealthy clients’ portfolios with investments in venture capital, real estate, structured debt and more—and now services more than $125 billion in assets, up 70% in one year. There’s also more to come: Late last month, iCapital said it would expand into the annuities market with the acquisition of fintech platform Simon, which helped issue more than $48 billion in structured investments and annuities last year.
Noticeably absent from this year’s list, Robinhood became ineligible after going public in July at a meteoric $30 billion valuation. Encapsulating the stock market’s wild year, Robinhood shares have plummeted more than 83% as user counts and trading volume plunged from last year’s record highs. Socially conscious neobank Aspiration, which in August said it was going public via a special purpose acquisition company, also drops off, though it has yet to begin trading.
In their place, brokerage Public.com debuts on the Fintech 50 less than three years after its launch in September 2019. With the help of investments from billionaire Shari Redstone, NFL player JJ Watt and influencer Casey Neistat, Public’s user count has roughly tripled to 3 million over the past year. The platform also quickly expanded its offerings beyond just stocks—this year adding support for non-fungible tokens, art, real estate, cryptocurrency and more.
Others reappearing on the Fintech 50 this year are 401(k) administrator Guideline, which crossed more than $6 billion in assets in April, and mobile app Stash, which now offers cryptocurrencies alongside its investing, banking and retirement offerings.
Here are the most innovative investing companies in fintech:
Administers 401(k) plans for small businesses for a base fee of $49 per month plus $8 per participating employee. Partners with payroll service providers including Square, Intuit, Gusto and ADP. New state laws like one in California requiring businesses with five or more employees to offer a retirement savings plan by June 30 are helping drive growth. In April, began offering SEP IRAs for the self-employed, too.
Headquarters: Austin, Texas
Funding: $344 million from General Atlantic, Generation Investment Management, Greyhound Capital and others
Latest valuation: $1.15 billion
Bona fides: Administers more than 30,000 small business 401(k)s, up 50% over last year.
Cofounders: CEO Kevin Busque, 43, previously cofounded freelance labor marketplace TaskRabbit; CTO Mike Nelson, 34; chief product officer Jeremy Caballero, 39.
Connects more than 10,000 financial advisors and their hundreds of thousands of high-net-worth clients to private equity, private debt, venture capital, real estate and hedge funds with as little as $25,000 invested per fund—much lower than traditional minimums for these funds, that can run from $1 million up to $10 million. Now providing its “white label” service to more than 140 firms, including Blackstone, The Carlyle Group, Brookfield, UBS, Deutsche Bank and Goldman Sachs.
Headquarters: New York City
Funding: $765 million from BlackRock, WestCap, Temasek and others
Latest valuation: $6 billion
Bona fides: Assets invested through the platform have swelled to some $20 billion, up about 70% in one year thanks in part to expansions across Europe and Asia.
Cofounders: CEO Lawrence Calcano, 59, a 17-year veteran of Goldman Sachs; managing partners Dan Vene, 46, and Nick Veronis, 57.
Brokerage app offering commission-free investing in stocks, ETFs and crypto, as well as fractional trading of NFTs and other collectibles and the ability for users to share their portfolios and trades–if they want to. Last year, Pulse stopped taking payments for order flow, a controversial practice that free-trading rivals like Robinhood still rely on, and debuted an optional tipping feature. In April it launched another new revenue source–a “Pulse” service that allows companies wanting to promote their stocks to pay for data about retail investors and to hold town halls. Early customers include buzzy cannabis stock Tilray and Dubai ride-hailer Swvl.
Headquarters: New York City
Funding: $310 million from Accel, Greycroft, Tiger Global Management and others
Latest valuation: $1.2 billion
Bona fides: User base has exploded to three million from less than one million at the end of 2020.
Cofounders: Co-CEOs Jannick Malling, 34, and Leif Abraham, 36—serial entrepreneurs hailing from Denmark and Germany, respectively.
Stash’s app offers fractional investing in stocks and ETFs, IRAs, checking accounts and a debit card that rewards purchases with fractional shares back for a flat monthly fee of $1 to $9. In January it rolled out Smart Portfolio, a Stash managed portfolio matched to an investor’s risk tolerance, with a $5 minimum investment and a 4% to 6% allocation to crypto. Already, 500,000 users have put money into Smart Portfolios. Last summer, Stash acquired financial literacy platform PayGrade and rebranded it Stash101, offering free educational content for students, teachers and parents.
Headquarters: New York City
Funding: $467 million from Union Square Ventures, Goodwater Capital, Eldridge Industries and others
Latest valuation: $1.3 billion
Bona fides: Revenue grew 65% to $86 million in 2021, while paying customers grew from 1.8 million to 2.4 million.
Cofounders: CEO Brandon Krieg, 47, and president Ed Robinson, 38, who met working on Macquarie’s electronic trading team.