Nutmeg Raises Another $32M To Disrupt Wealth Management Startup

Nutmeg, the UK-based online investment management startup, intends to disrupt the world of financial investing by making it affordable for the masses. But to do that it needs cash. Lots of cash. Today they’ve raised another $32 million, taking their total funds raised to $50m. To put that in perspective, WealthFront in the US has raised $65.5M, while Betterment has raised $45M to enter this market.

The investors in today’s round include Carphone Warehouse founder Charles Dunstone (pictured, on left), asset management house Schroders, and top-tier European VC Balderton Capital. Existing investors include Draper Associates and Daniel Aegerter from Armada Investment Group also participated. The new funds will be spent on customer acquisition and product development. Tim Draper calls Nutmeg “among the very best” of “exciting new financial technology businesses.”

Nutmeg offers portfolio management services to anyone with as little as £1,000 to invest. It now has over 35,000 registered users and claims its customer acquisition in Q1 was 350% up on last year and is already in the top 25 of wealth managers in the UK. In the UK this market is worth £500 billion, and while traditional investment managers pay 1.36 percent commission in fees, Nutmeg’s charges start at 1 percent and go as low as 0.3 percent.

Founded by Nick Hungerford (pictured, on right) originally raised from Draper Associates after his Stanford MBA. He joined with co-founder William Todd, a former derivatives expert. Hungerford was previously an investment manager at Brewin Dolphin.

In 2012 Nutmeg raised $5.3 million from Pentech, Draper, Spotify board member Klaus Hommels and Armada Investment Group chairman Daniel Aegerter.

Hungerford told me the big capital raise was necessary to bring ‘Amazon-like’ levels of customer service to an industry where customers are routinely charged huge fees for “visiting a plus office once a year.”

Competitors in Europe are thin on the ground and we are only aware of Vaamo in this area.

Schroders executive chairman Massimo Tosato will take a seat on Nutmeg’s board.