PALO ALTO, Calif., December 16, 1999 – Financial Engines, Inc. today announced that it has closed its Series E round of financing, receiving $85 million in funding from twelve investors. Oak Hill Capital Partners, LP led the round, contributing $25 million to the online investment advisory firm. The balance of the funding was received from member companies of American International Group, Inc. (AIG), The Chase Manhattan Corporation, Chase H&Q, E*TRADE, The Goldman Sachs Group, Inc., Intel Corporation, Merrill Lynch, Thomas Weisel Partners, State Street Global Advisors (SSgA), Washington Mutual, Inc. and Wells Fargo & Company. Several of Financial Engines’ existing investors also participated in the round including Foundation Capital, New Enterprise Associates, Charter Venture Capital, Pivotal and Amerindo.
In a report published in June 1998, Michael Gazala of Forrester Research asserted that 1.5 million employees would use online retirement investment advice by 2000. Forrester also projected that the trend will continue as 6 million plan participants will be using online advice by the end of 2002. With first-mover advantage established, Financial Engines is leading this category.
“We are impressed by the innovative solution Financial Engines has created to fill a universal need,” said Mark Wolfson, managing partner, Oak Hill Capital Management. “The market opportunity is enormous and the company is uniquely positioned to impact the financial services industry in a fundamental way.”
Completing the strategic round will contribute to the company’s ability to provide its service to more consumers rapidly. These new relationships will provide increased visibility throughout the financial services industry and, as a group, these investors include leaders in the marketing of products and services for individual investors.
“E*TRADE’s investment in Financial Engines reflects our commitment to empowering individual investors to take control of their financial futures,” said Tom Bevilacqua, general partner of the E*TRADE eCommerce Fund, L.P. “Financial Engines is a leader in the online investment advice category, and we look forward to developing a powerful relationship through which the benefits of Financial Engines can be made available to our customers.”
“We believe online investment advice will be one of the most powerful forces reshaping the financial service industry over the next three years,” said Jeff Maggioncalda, president and CEO of Financial Engines. “With the backing of our strategic investors, we plan to broaden our reach rapidly to help consumers take control of their financial futures.”
At the close of the Series E financing, each of the strategic investors holds less than 4% of the company.
The investors assembled in this round include the premier institutions in their respective categories in the U.S. and global financial services industry (in alphabetical order):
American International Group, Inc. (AIG)
– AIG is the leading US-based international insurance organization and among the largest underwriters of commercial and industrial coverages in the United States. Its member companies write property, casualty, marine, life and financial lines insurance in approximately 130 countries and jurisdictions, and are engaged in a range of financial services and investment management businesses. AIG, through SunAmerica, is one of the largest providers of retirement savings and asset management services in the U.S.
– The Chase Manhattan Corporation, with more than $370 billion in assets, is one of the world’s premier financial services institutions, with operations in 48 countries around the globe. Chase has a top-tier ranking in all areas of investment banking, private banking, trading and global markets activities as well as information and transaction processing. Chase can be reached on the Web at www.chase.com.
– Chase H&Q has been a leader in financing the new economy since 1968. Chase H&Q provides entrepreneurs and their companies with access to capital and financial expertise, and provides investors with access to opportunities for growth. CHASE H&Q, Hambrecht & Quist LLC is a wholly owned subsidiary of The Chase Manhattan Corporation.
– A global leader in electronic personal financial services, E*TRADE is the world’s most-visited online investing site (Media Metrix 9/99).
– In addition to the US, E*TRADE serves customers through branded web sites in Japan, the U.K., Sweden, France, Australia, New Zealand and Canada.
– For four out of the last five quarters, E*TRADE has been named the number one online brokerage by Gomez Advisors.
– Goldman Sachs is a leading global investment banking and securities firm, providing a full range of investing, advisory and financing services worldwide to a substantial and diversified client base, which includes corporations, financial institutions, governments and high net worth individuals.
– Merrill Lynch is one of the world’s leading financial management and advisory companies with offices in 44 countries and total client assets exceeding $1.5 trillion. As an investment bank, it is the top global underwriter and market maker of debt and equity securities and a leading strategic advisor to corporations, governments, institutions, and individuals worldwide. Through its Asset Management Group, the company is one of the world’s largest managers of financial assets, which total approximately $514 billion, and through its Group Employee Services division, the firm provides retirement planning and stock-based benefit plan services to more than 4.5 million employees in Corporate America.
State Street Global Advisors
– State Street Global Advisors (SSgA), the investment management group of State Street Corporation, uses quantitative and traditional techniques to manage $582 billion in investment programs and portfolios for institutional and individual investors. SSgA is the third largest money manager in the US and the sixth largest worldwide.
– SSgA has full investment operations in eight countries and offices in 24 cities worldwide.
– Beginning two years ago, SSgA has enjoyed a partnership with Financial Engines to offer financial advice to its defined contribution clients.
Thomas Weisel Partners
– A merchant bank focused on the areas of transformation in the growth economy.
– The largest U.S. savings institution and ninth largest banking company with approximately 2,000 offices across the U.S.
Wells Fargo Bank
– Wells Fargo has over $260 billion in institutional investment assets under administration. With over 30,000 middle market and corporate business customers, Wells Fargo’s Wholesale Internet Services Group allows businesses to conduct business electronically among their customers, trading partners and financial institutions. Ranked the second leading commercial bank in the world, Wells Fargo has the resources, experience and technology necessary to help businesses succeed, both online and off.