Eagle-eyed readers will recall that we mentioned M1 Finance earlier today in our look at a few trends in the fintech industry. We’re back with the firm this afternoon as it has a bit of news that’s worth discussing.
Chicago-based M1 Finance announced today that it has reached the $1 billion assets under management mark, or AUM. Reaching AUM thresholds provides useful milestones that we can use to track the progress of various players in the fintech and finservices worlds.
M1 is an interesting company, bringing together a number of products to form a single platform. Its hybrid nature makes comparing its AUM to other companies’ histories a bit dicey. Still, for reference, Wealthfront, a roboadvisor, announced that it started 2013 with AUM of $100 million, and closed that year with $538 million. By mid-2014, Wealthfront had $1 billion AUM. Today it has over $20 billion.
So, the numbers matter, and reaching thresholds can help us understand where a company is in its maturity cycle.
Let’s talk about M1 Finance’s AUM growth, its revenue growth and its product model. It’s a neat company with a history of efficient growth.
We’ll start with product, as how the company approaches its feature-set helps explain how the service is priced, which in turn helps us grok the company’s growth.
M1 is not a roboadvisor, or a simple neobank, or a lending product; it’s all three at once, providing effectively the digital equivalent of a full-service bank, admittedly in the form of an online experience instead of a brick-and-mortar outlet. M1 users can open investment accounts, checking accounts, get a debit card and borrow money against their investment portfolios; it’s a cohesive feature set.