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Goldman Sachs takes Nutmeg stake in £45m fundraising

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Goldman Sachs takes Nutmeg stake in £45m fundraising

Goldman Sachs has taken a stake in robo-adviser Nutmeg as the company raised £45 million to fund an international expansion. 

Nutmeg's latest funding round was jointly led by Goldman Sachs' Principal Strategic Investments arm and Convoy, Hong Kong's largest listed firm of financial advisers. 

The company said the total was the largest ever for a single funding round by a digital wealth manager in Europe, and would be used to bankroll an expansion into Asia.

Goldmans partner Rana Yared will join Nutmeg's board. She said:  '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.' 

Nutmeg had previously raised a total of £71 million from investors, including Convoy, Schroders and Taipei Fubon Bank (TFB).

The robo-adviser, now led by chief executive Martin Stead (pictured), has been putting that money to use, increasing advertising and launching new services such as its 10-strong socially responsible range rolled out in November last year. 

The business, launched in 2011, now has over £1.5 billion of assets under management. However, its ability to reach profitability has been questioned over the years by sceptics. 

Its last results showed that Nutmeg's losses rose by nearly a third to £12.4 million. The firm said this was due to rising regulatory costs and continued investment in the business. 

Revenue was up by 76.9% from £2.6 million to £4.6 million, but operating expenses rose by 42% to £16.9 million, up from £11.9 million, over the period.

Stead said: 'This is a vote of confidence in our team, investment proposition and track record, and marks Nutmeg’s transition from start-up to scale-up.

'We look forward to Goldman Sachs’ support and to exploring commercial collaboration opportunities that further accelerate our growth plans.

'This funding also enables us to expand internationally, with our plug-and-play B2B expansion model, which leverages both our technology and investment capabilities, developed in this highly respected FCA-regulated market. We plan to launch with existing partners Convoy in Hong Kong this year.'

As part of the deal, which is subject to approval by the Financial Conduct Authority, Goldman Sachs partner Rana Yared will join Nutmeg's board. 

 

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