InvestCloud eyes IPO to become wealthtech platform of choice

The news: The US-based technology vendor for global asset and wealth managers is considering an IPO that could value it at up to $10 billion to fulfill its goal of becoming a global platform.

InvestCloud offers a comprehensive set of wealthtech services via four subplatforms: wealth advisor, private banker, financial supermarket, and a customizable financial platform.

How we got here: InvestCloud has had a record year supporting wealth managers’ digital transformation.

• The wealthtech struck a chord with wealth managers at the right time: Eighty-five percent of business leaders across a range of wealth management firms reported last year that partnering with third-party providers was important or very important for their company in the next 12 to 18 months, per our “The US Wealth Management Ecosystem” report.
• As a result, InvestCloud reached a $1 billion valuation in February and now has more than $4 trillion in assets on its platform. Revenues, meanwhile, have surpassed $285 million and are projected to reach $400 million next year.

Why an IPO? While Investcloud hasn’t made a decision yet, an IPO could be its best bet to take on competitors globally.

• InvestCloud has made clear its plans for global domination, ramping up operations in European and Asian markets over the past year. But it faces large peers that also offer all-encompassing solutions and are backed by significant capital.
• Enfusion, for example, went public last month priced at $1.9 billion, highlighting market appetite for such solutions. And IHS Markit, which is owned by S&P Global, just unveiled a digital onboarding solution for fund managers. Early-stage wealthtechs are also raising record private funding, which could pose new threats to established vendors.
• As such, an IPO would be an effective way for InvestCloud to draw the necessary capital to expand its product suite globally and remain competitive.