Wealthfront Corp. is looking to rake in the wealth after going public on Friday.
The Palo Alto-based automated digital wealth platform raised $486 million after selling 43.6 million shares, putting the company’s valuation at roughly $2 billion.
Wealthfront shares began trading on the Nasdaq Global Select Market under the ticker “WLTH.” The company made more than 34.6 million shares of common stock available for the initial public offering (IPO) for $14—an offering that expires on Monday, December 15.
The stock was up around 4% by midafternoon on Friday after trading began.
To mark the occasion, the company’s leadership—including CEO David Fortunato, cofounder and chairman Andy Rachleff, and cofounder Dan Carroll—rang the opening bell at the Nasdaq MarketSite in Times Square.
Courting Gen Z and millennial investors
The listing has been a long time coming. Wealthfront was founded in 2008 under the name KaChing. In 2011, it was reborn as Wealthfront and, over the past decade or so, has become known for its automated investment products and services—something young investors have found particularly alluring.
Wealthfront refers to these consumers as “digital natives,” defining them as people born after 1980. The fintech also offers other financial products, such as high-yield savings accounts, and will soon start offering home lending services.
Its filing documents with the Securities and Exchange Commission (SEC) show that the company has $88 billion in assets under management. For the six months ended July 31, it had net income of nearly $61 million on revenue of almost $176 million.
In an interview with Yahoo Finance on Friday, Fortunato said that the company will remain competitive in a tight market for a key reason: Wealthfront can offer many of the same services as traditional banks but at lower costs. “[Customers] are going to be able to invest, save, and borrow from Wealthfront at a better cost than they would otherwise,” he said.
Fortunato added that attracting customers early and sticking with them for the long haul has helped position Wealthfront for growth. “Our goal is to compound with our clients for decades,” he said.
Wealthfront joins other large fintech companies in going public this year, including Chime Financial and Klarna Group.
Since its IPO in June, Chime shares are down more than 23%, and Klarna, which went public in September, has seen its shares fall by almost 28%.