Online investment management service Nutmeg announced on Tuesday that it has raised £45 million ($58.2 million) in an investment round led by Goldman Sachs’ Principal Strategic Investments arm. Existing investor Convoy Global Holdings Ltd., a Hong Kong-based financial advisory firm, also participated in this latest round of funding. Once the funding is approved by the U.K.’s Financial Conduct Authority, Nutmeg plans to use the proceeds to continue its international expansion push.
Nutmeg was founded in 2011 and specializes in online investment management services, including individual savings accounts, pensions and general investment accounts. Customers can manage their investments via a smartphone app as well as Nutmeg’s website, and the service allows clients to tailor their portfolio according to their specific desired risk level.
Goldman Sachs’ Rana Yared will become the newest member of Nutmeg’s board following the bank’s investment. Upon the announcement of Goldman Sachs’ investment, she stated that “Nutmeg has already established itself as one of the fastest growing wealth managers in the UK. We are excited to fuel further growth and innovation through our investment and to support management in their vision of leveraging technology to broaden access to world-class investment solutions."
Despite their success carrying out their latest funding round, Nutmeg has hit some speedbumps in recent years. The most recent accounts from the company indicate that Nutmeg’s losses now stand at more than £12 million, which the company attributes to rising regulatory costs and increased investment in itself. Nutmeg also faces expanding competition from emerging digital wealth management companies such as Plum, Monzo and Revolut.
However, Nutmeg’s CEO Martin Stead has noted that the company has realized strong investment returns since its founding and now boasts over 60,000 investors. Notably, Nutmeg has been successful at targeting underrepresented classes of investors: about 40 percent of Nutmeg’s clients have never invested before, 35 percent of its customers are female (about a third more than the market average), and Nutmeg’s average customer age is 40 (around a decade younger than average).
According to data website CrunchBase, Nutmeg has raised almost $90 million across four funding rounds; the most recent round of funding was conducted in December 2016. Following this latest round of funding, the company says it is now valued at £245 million ($317.1 million).