Retirement services provider Empower Retirement agreed yesterday to buy Personal Capital, a US-based digital wealth manager backed by financial services firms BBVA, USAA and Power Financial Corporation, for $825m.
The deal will consist of $825m upfront, and Empower plans to commit up to $175m more in order to drive business growth. The deal remains subject to customary closing conditions, including regulatory approval, and is expected to close in the second half of the year.
Personal Capital has built a digital wealth management platform that aggregates a user’s financial accounts and offers financial planning tools and recommendations from investment advisers. It has more than 2.5 million customers and manages more than $12bn in assets.
Empower facilitates employer-sponsored retirement plans and allows customers to manage individual retirement accounts. It will integrate the company’s capabilities into its own offering but Personal Capital will continue to offer its services to its users.
Jay Shah, Personal Capital’s chief executive, will serve as president of the acquired company and report to Empower CEO Edmund Murphy. The companies will set up a joint team to integrate their respective offerings.
Personal Capital had raised a total of $267m since being founded in 2009, most recently picking up $50m in a February 2019 series F round led by IGM Financial, a subsidiary of Power Financial. IGM had already led a $115m series E round that closed in 2017, with contributions from undisclosed investors.
The company secured $50m in a 2014 series D round featuring USAA and BBVA Ventures – a subsidiary of BBVA that has since evolved into the venture capital firm it sponsors, Propel Venture Partners – in addition to Corsair Capital, IVP, Venrock and Crosslink Capital. Its early investors included Blackrock and Correlation Ventures.
