Nutmeg’s 2015 numbers point to fresh capital raise after losing £9m despite doubling assets

By Daniel Lanyon on Friday 7 October 2016

Alternative Lending

The market leader in the fast growing robo-advice space saw a ramp up in both costs as well as revenues in its 2015 numbers.

Nutmeg, the market leader in the burgeoning robo-advice industry lost £9m in 2015 despite seeing investor assets double, according to documents filed to Companies House.

Robo-advice is the name given to the fast growing process of disruption to the asset management industry, particularly in terms of wealth management. Robo-advice firms are online and algorithm driven based on risk-targeted models to build portfolios for investors and conduct asset allocation.

Unlike market leaders in online portfolio management and brokering like Hargreaves Lansdown they invest for you.They also tend to be advocates of passive vehicles – mostly through exchange traded funds - rather than active mutual funds which have traditionally been the mainstay of wealth managers. Robots are not usually involved.

Nutmeg, which is one of the best known robo-advisors - or online discretionary fund management as it bills itself - saw losses ramp up from £5.3m in 2014 to £8.9m in 2015. This came alongside a huge marketing campaign as well as the launch of several new products. Its assets under management (AUM) doubled, the firm said although they didn’t give exact numbers. This helped turnover to increase to £1.7m up from £635,000 in 2014. The number of customers increased by 50 per cent in the same period with a significant increase in costs from £6m to £10.8m.

Martin Stead, chief executive officer at Nutmeg, says despite the numbers Nutmeg is on track with their mission to “democratise wealth management and empower generations of investors.”

“As is natural for an early-stage company, we have been investing heavily to establish ourselves and our brand, in line with an ambitious business plan. We now have an unparalleled, scalable platform; a highly experienced team; and a proven marketing model to win customers efficiently.”

“Both customer numbers and assets under management have been increasing significantly over the past 18 months, and we’re currently tracking ahead of our targets for 2016.

“We’re proud of everything that we achieved last year, and I’d like to thank our investors, our employees and, most of all, our customers for their support in helping us to build a business that’s changing the world of investing for the better.”

Nutmeg is backed by John Kay, fellow of St John’s College at Oxford University and a visiting professor at the London School of Economics, who has a sizeable stake in the firm.

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