M1 Finance is a Chicago-based fintech that combines automated investing, borrowing and checking/spending into a single platform. The company publicly launched in late 2016 after a mid-2015 inception and aims to consolidate users’ financial lives across Invest, Borrow and Spend. It reports “hundreds of thousands” of customers and $4.5 billion in assets under management, up from $3.5 billion at its prior raise; since July 1, 2020 it has more than doubled its user base and tripled AUM. Headcount has grown from about 40 at the start of 2020 to roughly 250 today. Recent product rollouts for Plus customers include Smart Transfers (Dec), Custodial Accounts (Feb) and Send Check (June). The company plans to use new capital to build products and features, further innovate the platform and hire. M1 Finance is a consumer fintech platform that combines automated investing with cash-management and borrowing products. The company added a cash-management product in early 2019 that the CEO says has attracted hundreds of millions in assets, and its borrowing product has quadrupled as a percentage of assets in the last year. M1 reports around 500,000 funded accounts and has grown assets under management from about $800M at the start of 2020 to $3.5B today. CEO Brian Barnes has targeted revenues of roughly 1% of consumer AUM (one example in the article notes 1% of $3B equals $30M). Management said it had barely touched its Series B and that its entire Series C remained untapped prior to this raise. With fresh capital the company expects to bolster marketing spend and continue competing with better-funded rivals. M1 Finance is a Chicago-based consumer fintech platform that combines roboadvising, neobanking and lending into a single, aggressively priced product. The company has shown rapid asset inflows, passing $1 billion AUM in February, $1.45 billion by its Series B in June, and surpassing $2 billion AUM ahead of this round. M1 says it aims to generate roughly 1% of AUM in revenue annually, implying a current revenue run rate of more than $20 million and a potential $25 million run rate by year-end if growth continues. The startup has tripled its user base since the start of the year, with users bringing funds from other platforms. CEO Brian Barnes has cited strong milestone attainment and investor demand as drivers of recent financings. M1 Finance operates a consumer-facing fintech platform that combines automated investing with personal banking products, including the newer M1 Spend offering. The company has grown assets under management rapidly, reaching $1.45 billion after crossing $1 billion earlier in the year. M1 targets generating roughly 1% of AUM in revenue and the article notes a theoretical 1% run rate on $1.45B equals about $14.5 million. Management says M1 Spend is still new and currently below the 1% take-rate target, but expects to hit that target over the next year as adoption increases. The firm reports falling blended customer-acquisition costs and stronger organic and word-of-mouth growth, which improves CAC payback dynamics. M1 plans to use new capital to double down on product development and make longer-term investments to accelerate growth. M1 Finance offers an automated investment tool (a robo-advisor) that lets users put their money to work in balanced portfolios without the hassle of manual management. Founder and CEO Brian Barnes raised $9 million a few years after graduating from Stanford and moved back to Chicago to build the platform. The company launched an MVP while navigating the heavily regulated finance industry and emphasizes design and simplicity to communicate a relatively complicated product quickly to consumers. M1 positions itself against other robo-advisors and discusses the benefits of robo-advisors versus all-ETF strategies. The team plans to differentiate through cost, product design, messaging, and targeted marketing channels. The article does not disclose revenue, user counts, or other operating metrics beyond the $9 million pre-launch raise.

Total raised

$312M

Funding rounds

5

Latest round

Series E

Latest activity

Jul 2021