Personal Capital claims to be the world’s first digital wealth management service, and it’s bolstering these claims with the closure of a $25 million funding round.
The funding will be used to hire new talent and grow the Silicon Valley-based company; CEO Bill Harris expects the company to be profitable by early 2015, and he’s planning to take it public.
Harris has devoted his career to helping individuals manage their money. He’s the former CEO of payment giants like Intuit and PayPal. But he considers Personal Capital to be the culmination of his life’s work.
Harris explained by phone that the goal for the company is to help the “forgotten middle [class]” get a comprehensive view of their spending. “The biggest problem is fragmentation,” he said. “For most of us, our money is completely scattered.”
Personal Capital is best known for its free dashboard, which is available to anyone. Securely sync up all your credit cards and bank accounts and the service will immediately show you a visual display of your spending. You can filter the results to see how much of your money is spent on restaurants, travel, school fees, and so on. It’s designed to be far more in-depth and personalized than existing personal finance services like Mint.com.
The company claims it now tracks $20 billion of assets each day.
One of the biggest surprises for people is how much they are paying in mutual fund fees. “We can save people thousands of dollars a year on this alone,” said Harris.
The mobile- and web-based tools are also designed to be used for basic financial planning. The data better equips you answer questions such as how much should you set aside for your retirement?
“Counting every dollar isn’t the important thing,” Harris explained. “It’s all about the big picture.”
Personal Capital makes its money when consumers opt to use the premium service — and hire its team of experts to manage their finances. Harris estimates that it’s a “low single digits” portion of users who convert to the paid product. Typically, these premium customers are earning anywhere from $100,000 to $5 million a year.
Crosslink Capital’s Jim Feuille led this financing and joined the company’s Board of Directors. Crosslink and BlackRock, the world’s largest asset management firm, are new investors. Existing investors Institutional Venture Partners (IVP) and Venrock participated in the series C round.