(Bloomberg) — SigFig Wealth Management LLC has become the latest robo-advisor to raise new funding, tapping investors including UBS Group AG and Eaton Vance Corp. for $40 million at an undisclosed valuation. Other investors in SigFig’s fundraising round include Comerica Inc., New York Life Insurance Co., Banco Santander SA’s InnoVentures fund, Bain Capital Ventures, Nyca Partners, and Union Square Ventures, according to a company statement published on Tuesday. The firm previously raised $19.6 million in four separate fundraisings, according to research firm CB Insights.
The fundraising is the latest from a robo-advisor, which aims to use new technology to offer better returns than traditional financial advisers. One of the largest such ‘robos,’ Betterment LLC, raised $100 million in fresh funding in March to give the firm a $700 million valuation. Wealth management startup Personal Capital Advisors Corp. also raised $75 million earlier this month.
The nascent sector is drawing interest from Wall Street incumbents eager to keep a lid on costs, invest in startups or experiment with new technologies. Citi Ventures, part of Citigroup Inc., has previously backed Betterment while Goldman Sachs Group Inc. acquired Honest Dollar, a startup that offers retirement services to workers without access to employer-based plans.
UBS’s Americas wealth management unit announced a partnership with SigFig last week that will see the digital wealth manager develop new technology and investment tools for the Swiss bank.
Investing in SigFig was a “better cost point than what we could develop ourselves,” Tom Naratil, president of UBS Americas, said in an interview. “This is a great way for us to get innovation and allow our advisors to use the technology.”
The deal with UBS does not restrict SigFig from teaming with other banks and the startup said it plans to use the new funds to hire more employees and expand its technology with the aim of partnering with more financial firms.