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Fintech AUM • Let’s learn about Technology Flow holistically

UBS and Wealth Front Last week it scrapped a planned deal to sell the robo-advisor startup to the financial giant for $1.4 billion. Instead, UBS invested $69.7 million in the company at a valuation that Wealthfront put at $1.4 billion.

In its note discussing the closing of the transaction and its latest fundraising, Wealthfront shared some useful information about its financial health, including that it will soon stop borrowing cash to operate.

Why do we care about a transaction that fails to complete? Information. Wealthfront’s notes on its financial results, its newly confirmed valuation, and what we know from external sources about its assets under management offer an interesting window into how fintech companies might be worth — and overvalued — today.

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During the 2020-2021 peak of the startup arc of the last business cycle, we saw fintech companies skyrocketing in terms of attracting investment, earning valuation and, on a related level, observing consumer interest. As we have seen in the results of major trading platforms such as Coinbase and Robinhood, there is a softening in demand for investment products among consumers; Given that the economy is generally poor today, this is not surprising.

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