Digital wealth manager Moneyfarm has raised £44.1m in its latest funding round.
The capital increase was led by M&G and included postal service provider Poste Italiane, which has been a minority shareholder in Moneyfarm since 2019.
The private placement will be completed by the end of the Q1 2022, subject to regulatory approvals, and will see investment giant M&G acquire a minority stake in Moneyfarm for an undisclosed sum.
The funding round will be used in three key areas, to support future development, expand its product proposition and build out its new B2B2C proposition through strategic partnerships.
Since it launched in 2012, Moneyfarm has raised £139m.
M&G has also partnered with Moneyfarm to provide a direct investment service to UK consumers.
M&G Wealth, the company’s UK wealth management arm, will use Moneyfarm’s existing technology, digital capabilities and investment guidance journeys to back its own branded proposition.
Designed by M&G Wealth, the direct digital service will be tailored to meet a range of customer risk appetites and profiles through a collection of multi-asset model portfolios, backed by a selection of actively-managed and passive funds.
MoneyFarm will deliver the operating models, including teams to support the technology platform and customer relationship management, together with custody and trading services.
Also, M&G and Moneyfarm said they will also explore a range of opportunities to partner in other European wealth markets.
David Montgomery, managing director at M&G Wealth, said: “With the launch of a direct, mobile-based investment platform, complementing our growing independent, proprietary and hybrid adviser businesses, our customers will be able to access the channel, advice and investment proposition that most suits their financial situation and needs.
“We have been highly impressed by Moneyfarm’s innovative approach and look forward to working together to build a simple and effective proposition to serve our next generation of retail customers.”
Giovanni Daprà, chief executive at Moneyfarm, said: “Moneyfarm was founded in 2012 on the core principle that personal investing should be simple and accessible to anyone to help improve their financial wellbeing.
“Having launched in the UK five years ago, we are very excited to be partnering with a proven name in M&G on the next stage of our journey.”
Direct channel growth
Holly Mackay, Boring Money chief executive, added: “The last two years have seen such significant growth in the direct channel, it can no longer be ignored by asset managers.
“Alongside execution-only journeys, the need for digital advice and lower-cost fixed fee advice packages for specific life events is clear, and I think we will see many more asset managers go back into both ‘ready-made’ investment solutions and convenient, digitally-delivered advice.
“The challenge, as ever, is that asset managers have an institutional mindset, not a consumer mindset, and so partnership feels like the right approach. There’s a reason that Audi’s engineers are not in charge of product and marketing.”
This article first appeared in our sister title International Adviser.