Since its launch in 2016, Sallie Krawcheck’s automated investing service has primarily faced the challenge of slow growth.
Often referred to as a robo advisor, Ellevest has struggled to grow to $2.4 billion in assets under management since its launch.
It must now also confront the challenge of its founder stepping down from her post as CEO due to an undisclosed medical diagnosis.
In a message distributed on LinkedIn this week, Krawcheck said Sylvia S. Kwan, her longtime colleague at Ellevest and the firm’s CIO, would move into a co-CEO role with Connie Hsiung, its current COO and CFO.
Krawcheck will shift to a board role and, according to the post, “provide guidance” as a member of the board but will not be involved in the firm’s day-to-day operations.
At the announcement of its founding in 2015, Ellevest had already raised $10 million in seed funding. That initial round was led by Morningstar, with additional high-profile investors that included Allianz’s Mohamed El-Erian, Mastercard CEO Ajay Banga and former Citigroup COO Robert Druskin. In March 2019, Ellevest announced it raised $33 million in Series A funding. Investors included Salesforce Ventures and more from Morningstar.
Krawcheck, a former president of Bank of America’s global wealth and investment division, has had little trouble raising additional capital over the years.
In November 2020, Allianz Life Insurance Company of North America announced a $7.5 million investment in Ellevest, part of a $12.3 million extension of the startup’s Series A financing round.
Ellevest surpassed $1 billion in AUM by January 2022 and announced a partnership with an investment from advisory technology provider Envestnet at the time.
Later, in April 2022, Ellevest announced a $53 million Series B funding round led by BMO and Contour Venture Partners. Returning investors included Melinda French Gates’ Pivotal Ventures, Salesforce Ventures, PayPal Ventures, Allianz and Morningstar.
The firm reached the $2 billion AUM threshold in March.
In a separate post on the Ellevest website this week, Krawcheck accurately states that the firm “is the industry’s only investing and wealth management company built by and for women,” but it is not the only one to have tried.
WorthFM, the robo advisor launched in 2015 by Amanda Steinberg, the well-known founder of the popular DailyWorth newsletter on personal finance for women, shuttered in 2018. Tina Powell, a former advisor who’s now chief of community at Intention.ly, launched SheCapital in 2015, only to shut it down a year later.
