Startup financial advisor Betterment has raised $100 million in new funding at a valuation of $700 million, the company announced Tuesday morning.
Despite major drops in the market in the past six months and higher-than-normal volatility, Betterment is set to have its best month ever in March, co-founder and chief executive officer Jon Stein told BuzzFeed News.
"January was our best month ever, we grew customers faster, we also grew assets faster than ever before," he said. "In March, it's going to be our best month ever, we just keep growing faster."
Swedish investment firm Kinnevik invested in the company for the first time in the new funding round, which also included earlier investors Bessemer Venture Partners, Menlo Ventures, Anthemis Group, and Francisco Partners
Stein said that the company still has money left over from its last funding round, and that the new money will be used to expand its offerings to clients.
Betterment's software helps customers manage their investments, creating custom portfolios based on factors including age and risk tolerance. The software also adjusts the composition of investment portfolios over time. Betterment invests its users' money into exchange traded funds that reflect broad categories of stocks and bonds, and charges an annual fee of .15% to .35% of assets.
Betterment last raised money in 2015, garnering a valuation of $500 million after a round led Francisco Partners. While the company's valuation has risen, it would also have accepted raising money at lower valuation, in what's known as a down-round — a major no-no in Silicon Valley circles.
"A lot of companies are taking down rounds, that’s a fine thing to do," Stein said. "If the market were saying 'Betterment, to raise this money you have to take this down round', we would probably do that."
The company wouldn't comment on whether or not it's profitable. A spokesperson said only that it is growing "rapidly" and has ramped up its marketing spending — you may have seen some TV ads recently — "to build a large, sustainable financial services company."
The New York City company, which recently allowed external financial advisers to use its software, now has nearly $4 billion in assets under management, the company says. Competitor Wealthfront manages over $3 billion and has 68,000 customers, according to a recent regulatory disclosure. When Wealthfront last raised money in 2014, it was valued at $700 million, a source told Re/Code.
Betterment has also faced competition from incumbent competitors. Industry giant Charles Schwab rolled out an automated investment advisory service, while Vanguard has a similar service.