M1 Finance has announced the completion of a successful funding round to the tune of $150 million. Led by Softbank’s Vision Fund 2, the latest financing project also attracted the participation of bankers and institutional investors.
This fresh financing brings the Chicago-based fintech M1’s funding total to more than $300 million since it was established in 2015. The Softbank-led funding round is the company’s fourth in barely a year. The financing it has garnered from backers places its value at $1.45 billion, propelling the company to unicorn status.
From ‘near unicorn’ to unicorn
Before the latest funding round, M1 was already enjoying ‘near unicorn’ status by the time it completed its Series D. The startup merges various fintech services such as investing, borrowing, and spending into one service. As a result, it has reported intensified growth, with over $.4.5 billion assets under management (AUM), 500 percent more than it managed 18 months prior.
From July 1 last year, M1’s AUM has tripled, and its user base more than doubled its size.
M1 is a fintech company that uses a robo-advisory platform where users can trade various financial assets. The Chicago-based company went public in late 2016. The company’s vision is to create a platform that allows people to manage and grow their money for free using automated methods.
M1, like many other fintech businesses, benefited from the pandemic-inspired surge. According to M1 founder and CEO Brian Barnes, millennials appeared to be its most prolific user base. With lockdowns dropping spending frequency and volume, coupled with uncertainty and the appetite to create wealth, millennials are signing up for the platform now more than ever.
As a result, M1’s AUM rose 400 percent, and its signups jumped 300 percent as of January 2021 relative to just the month before.
New services launched
As an automated trading platform, M1 continues to launch new services to its customers. In December, it introduced Smart Transfers, a plan exclusive to “Plus” clients that automates their financial objectives based on pre-set rules. Moreover, the company also launched the Custodial Accounts in February to help parents and guardians care for their children’s investment portfolio.
Barnes said that providing flexibility and options are core fundamentals for M1. The CEO explained that they always push for change and veer away from cookie-cutter portfolios.
Key to M1’s success is sustained innovation across its invest-borrow-spend services and continually finding solutions to ensure a seamless experience for its customers, added Barnes.
Other market watchers are impressed with M1’s growth thus far.
For instance, the Munish Varma of SoftBank Investment Advisers thinks that the company is “well-positioned” to provide users with a one-stop app to keep investing, spending, and borrowing.
From the observers’ point of view, M1 seems to be geared towards sustained success in the future. From an initial employee pool of just 40 in 2020, it now has more than 250 employees. Furthermore, it is utilizing its pooled capital to come up with exciting features and services and innovate its platform.
