David Fortunato has worked at Wealthfront for 16 years and was named CEO in 2021.
Illustration by Óscar Raña for Forbes
T
he stock market has never been higher, but that doesn’t mean it’s an easy time to start a fintech aimed at investors.
In an industry saturated with legacy players like Vanguard, Fidelity, BlackRock and Charles Schwab that offer easy access to funds for retail investors with minuscule management fees, it’s difficult to scale fast enough to offer a product to retail investors at a competitive price.
It wasn’t always so. Forbes put Robinhood on our very first Fintech 50 list in 2015. Back then, the startup was catalyzing the race to the bottom in fees by offering commission-free trading. (Its business instead relies on the controversial practice of payment for order flow from the market makers who execute its clients’ trades.) The now-public Robinhood had a phenomenal year. Its stock has quadrupled since the start of 2024, fueled by three consecutive quarters with a net profit of at least $150 million. Its assets under custody at the end of November were $195 billion, up 106% year-over-year.
We’re still searching for the next Robinhood. Just two firms were selected for this year’s Fintech 50 in the investing category, making way for more up-and-comers in other areas like payments and personal finance. That meant dropping a few multi-time list members like iCapital, a longtime mainstay which partners with financial advisors to expand access to alternative investments and crossed $200 billion in assets invested through its platform last year, but with a growth rate now more indicative of a maturing business than an early-stage rocket ship.
One exception to the rule, Wealthfront, which was founded in 2008, made the first Fintech 50 list in 2015 and then dropped off until 2024. It’s been growing too fast to ignore. With $80 billion in assets under management, up from $55 billion a year ago, it has left every other new-age robo-advisor in the dust. Its revenue grew 46% last year and has soared 260% in a two-year span, from $80 million in 2022 to $289 million in 2024. It charges a 0.25% management fee and also earns some interest on customers’ cash deposits and loans it extends.
The lone other investing startup on the list, Capitalize, is appearing for the second straight year after raising a $19 million Series B round in August. Capitalize simplifies the task of tracking down and rolling over old 401(k) accounts, a useful service given the growing prevalence of workplace retirement savings accounts, even if job-hopping has slowed from its frenzied pace in 2022. Capitalize is free for individual users and generates revenue by charging IRA providers like Robinhood, SoFi or Schwab for facilitating asset transfers onto their platforms.
Here’s more on the two investing companies on this year’s Fintech 50.
Capitalize
Headquarters: New York, New York.
Capitalize helps users track down and combine old 401(k) accounts—the company estimates there’s $1.65 trillion in unclaimed retirement assets out there—into a rollover IRA at one of its partners, which include Schwab, SoFi and Betterment. It replaces the tedious process of phone calls and paperwork with a simple online experience and also serves financial institutions, which can integrate Capitalize’s software to handle rollovers for their clients. In 2024, the company added Ellevest and M1 to its roster of rollover IRA partners and raised $19 million in Series B funding.
Funding: $35 million from RRE, Canapi and Walkabout, among others.
Bona fides: Increased annualized rollover volume on the platform in 2024 to $3 billion from $750 million the year before.
Cofounders: CEO Gaurav Sharma, 40, a veteran of hedge fund Greenlight Capital, JPMorgan’s Highbridge and UBS; CTO Christopher Phillips, 49, who was CTO for IAC’s Applications Group.
Wealthfront
Headquarters: Palo Alto, California.
Wealthfront is a profitable robo-advisor with $80 billion in assets under management in prepackaged stock and bond portfolios and cash accounts currently yielding 4% interest. Its $289 million in revenue comes from the 0.25% management fee it charges, interest on customers’ cash deposits it earns from partner banks and interest from loans it makes, among other business lines. In May 2024, it introduced an automated bond ladder for users offering a portfolio of U.S. Treasuries, which are exempt from state income taxes, with bonds maturing at different dates to provide steady income. That product now yields over 4.1%, net of the management fee.
Funding: $230 million from Tiger Global Management, Index Ventures and Spark Capital, among others.
Latest valuation: $1.4 billion.
Date of last valuation: September 2022.
Bona fides: Revenue grew 46% in 2024 to $289 million; user base increased to 1.1 million from 750,000.
Cofounders: Chairman Andy Rachleff, 66, who also cofounded venture capital firm Benchmark; chief strategy officer Dan Carroll, 43.
CEO: David Fortunato, 39, an Amherst College alum who was Wealthfront’s CTO for a decade and took over from Rachleff in 2021.
