Altruist, the RIA custodian challenger built on modern technology, announced yesterday that they had raised $169mm in a Series E round valuing the company at $1.5B+. This crosses them over into "Unicorn" territory after narrowly missing last year with a Series D valuation of reportedly $962mm.
So with $450mm of funding raised, a $1.5b valuation in about 6 years, and having reportedly grown revenue by 550% last year, it is worth pausing to look at what is going on here. Without detracting from what is clearly a great vision and great execution, we would like to point out a more broadly applicable trend: new technology.
In normal times, incumbents have a tremendous advantage over challengers. Their installed base, financial resources, and established brands make it difficult for challengers to make significant inroads. However, when we see a significant advance in technology, the positions can be reversed. The challengers are better able to adopt the new technologies while the incumbents struggle to replace their older technology, a phenomenon known as "Tech Debt". To the extent the new technology has significant operational and product advantages, and to the extent that the challenger is able to execute well, the challenger will have at least some advantage over the incumbent.
In any case, it is nice to see a new Unicorn in WealthTech, even though I have hated the term "Unicorn" since the very first moment I heard it.