Fintech VC Deal of The Week – RoboAdvisor Financial Engines Acquired for $3B


By Cindy Taylor/ Publisher – We actually have two VC deals of the week to comment on for you today.  The first is news that San Francisco-based private equity firm Hellman & Friedman has agreed to acquired the publicly traded robo-advisor Financial Engines for $3.02B this week.  That is HUGE news all by itself, and according to one our investment banking sources, “shows how desperate some of these firms are for good businesses.”

The deal is a beauty, though, because the firm already owns Edelman Financial Services, founded by wealth management luminary Ric Edelman, and the plan is to merge the two into a powerhouse unit.  Financial Engines currently has $169B AUM and Edelman has nearly $22B AUM.  The cross-marketing opportunities between the two companies’ customer bases are clearly compelling with this deal.

Hellman & Friedman has also invested in some fairly substantial financial firms in the past including Nasdaq, which it exited in 2007, LPL Financial, which it exited in 2013 and going back to the 90’s, Franklin Templeton, which it exited in 1997.

The second HUGE deal we heard about just today is word that the instant messaging app Telegram has called off its initial coin offering (ICO).  Now normally, this might be cause for concern, but in the case of Telegram, which has a huge following worldwide, the ICO is no longer necessary for its capital raise, because it’s already amassed $1.7B from major VCs, the likes of Sequoia Capital and Benchmark.

As a reminder, we’ve written about the Telegram ICO in the past, and it was rumored that they were seeking up to $5B (and then settled on $2B) in fundraising via an ICO.  But why bother with an ICO, which would have had major international regulatory scrutiny – particularly given the size of the raise they were looking at – when you can raise the capital through more traditional means instead?  They are also only planning to use around $400M for the next several years, so why risk it?  And off on another tangent, what are they planning to do with that remaining $1.3B they’ve raised in the meantime?  Put it in a money market?

Anyway, two HUGE deals in the world of VC this week.  What will next week bring us?