Scorching FinTech Market Keeps Attracting New Players As NerdWallet Raises $64 Million
TECHCRUNCH: NerdWallet, the six-year-old company launched with $800 by company co-founder and chief executive, Tim Chen, has raised $64 million in its first round of outside financing. Sources with knowledge of the company’s plans had put the round at $60 million. NerdWallet also raised an additional $36 million through a revolving loan facility with Silicon Valley Bank.
The later stage round came from a host of connected angel investors in the financial technology sector and was led by the later stage growth equity investor Institutional Venture Partners. Additional participation came from RRE Ventures and iGlobe Partners, an Asia Pacific-based investment firm.
Last year, 30 million people used NerdWallet to get financial advice on a range of subjects. The company offers comparison shopping tools on financial products including: healthcare; mortgages; life insurance; banking; credit cards; financial services and wealth management; small business tools, and college loans.
“To be honest, I want to cover every substantial financial decision that anyone can make in their life,” said Tim Chen. “We’re talking about a shitload of big decisions there.”
Chen’s company is squarely focused on the content business for now, but NerdWallet may have eventual aspirations to provide financial tools as well as financial advice for a new generation of financial services consumers.
The secret to NerdWallet’s success, aside from Chen’s steady management and decision to steadily grow a profitable business rather than rush to take capital, comes from a basic truth of the financial services industry. As Chen puts it, “There’s this huge asymmetry of information.”
Ultimately the tools that are the best for consumers may not have the best rewards for service providers who are incentivized by the funds they’re peddling. Much of the cash that Chen has raised for NerdWallet will, in fact, be spent on product.
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