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Ex-Wall Streeter Raises $16.5 Million More For LearnVest, An Affordable Financial Planner For The 99%
Ex-Wall Streeter Raises $16.5 Million More For LearnVest, An Affordable Financial Planner For The 99%
Alyson ShontellJul 26, 2013, 19:59 IST
Daniel Goodman / Business InsiderAlexa Von Tobel (second in from right) with her team.LearnVest, a financial planning startup founded by Alexa Von Tobel, has raised $16.5 million to continue building an affordable money management solution. Investors include Accel Partners, which led LearnVest's earlier $20 million round of financing, American Express Ventures, Claritas Capital, Carlyle Group's Ed Mathias and former T. Rowe Price CEO Todd Ruppert.LearnVest has raised more than $40 million to date. Its last round of financing valued the company at about $100 million.Von Tobel, a former Morgan Stanley trader and Harvard Business School drop-out, likens her company to "Weight Watchers for money." And in fact, the former CFO of Weight Watchers Ann Sardini, is one of LearnVest's four new advisors. Others include Gilt Groupe's Susan Lyne, Mathias and Ruppert. LearnVest is also opening a new office in Phoenix, Arizona,where it will train the Certified Financial Planners (CFPs) it hires. LearnVest currently has 25 on staff and between 80 and 100 employees total.LearnVest's CFPs work one-on-one with clients to help them save money. They can not, however, buy and sell stocks for them. Unlike traditional financial planners which may take between 2 and 2.5 percent of an account with less than $100,000 under management, LearnVest costs a few hundred dollars to use. Its rates resemble gym memberships with a set up fee followed by monthly charges of $19.Once users sign up, they have an initial call and are assigned to one of LearnVest's CFPs. Then they enter a customized 7-part program to set goals and get their savings on track.It's a great idea in theory, but Von Tobel made a casual comment during our call which could actually hint at a flaw in her business model."Alyson, I'm sure you don't think about financial planning much, but I think about it every second of every single day," she joked.She's right. I don't think about financial planning at all. I pay monthly bills, stay out of debt, keep an eye on savings and call it a day. I'm self-reliant and thus unwilling to pay even a few hundred dollars for Von Tobel's service.But I'm LearnVest's target demographic. Von Tobel says LearnVest's subscribers are men and women between the ages of 25 and 55, they are college educated and have household incomes that exceed $60,000. With that said, Von Tobel says people are more likely to subscribe to LearnVest after a big life moment: buying a house, having a child or getting married. None of those describe me. And on the opposite end of the spectrum, Von Tobel has a few millionaires using her service because it's a relatively cheap and easy solution.There's another concern. While LearnVest may be a steal from a consumer perspective, it's not clear if the low prices will sustain the company. With LearnVest's current pricing structure, it only generates $300 to $600 per customer in the first year and $228 every year after. LearnVest needs nearly 2,000 paying customers to generate $1 million. Von Tobel wouldn't say how many paying subscribers LearnVest has, just that the company has grown 200% in the past year. It grew 300% the year prior. Her new investor, American Express, may help boost growth even more. Von Tobel hinted that her product would soon be "distributed to a lot of people quickly." American Express Ventures' Managing Partner Harshul Sanghi indicated a strategic partnership in a release. He said: "As we seek to expand our portfolio of products across American Express, we believe LearnVest Planning can be an important partner in helping us to bring customers more convenient, affordable and transparent ways to manage their money."For more on Von Tobel's plans to take on Wall Street, or for how LearnVest works, click here.This story was originally published by LearnVest.
