Wealthfront is following in the footsteps of Circle and Chime with its own initial public offering, but this time it’s confidential.
Wealthfront, a wealth management and digital banking fintech, confidentially submitted a draft registration statement to the Securities and Exchange Commission on Monday, according to a company announcement. The number of shares and the price range for the proposed IPO have not been released.
Confidential filings aren’t unheard of — Klarna’s IPO was initially filed confidentially. A confidential offering allows a company to keep its financial information away from public scrutiny until closer to the IPO’s official date.
“The market has found some optimism from recent IPOs, so seeing Wealthfront file confidentially is a good sign for the market,” said Kyle Stanford, director of research at U.S. Venture for PitchBook. “Filing confidentially will allow the company to gauge interest before spilling their financials in a public S-1 (form).”
Wealthfront’s IPO is the latest in a series, with the fintechs Chime and Circle both entering the public market in recent weeks. Circle’s stock surged in its first few weeks as optimism about stablecoins has been sweeping the U.S. market.
Chime had a strong opening for its Nasdaq debut, but its stock price dropped as the Senate passed the GENIUS Act to regulate stablecoins. Circle also saw a dip in stock value Tuesday, but not enough to wipe out its initial opening rally.
“Wealthfront’s IPO filing is the latest in a trend of financial services disruptors seeking to go public,” said Samuel Kerr, Mergermarket’s head of global equity capital markets. “The astounding success of Circle’s IPO (up 750% from offer price as of Monday’s close) as well as a strong opening for Chime are both strong tailwinds for fintech, but every IPO issuer will be judged on its own merits.”
Kerr believes that Wealthfront could have a “receptive investor base” for its IPO as well.
“Wealthfront has recently posted impressive AUM numbers alongside solid financial growth and operates in an industry ripe for disruption,” he said. “The strength of fintech IPOs so far this year certainly doesn’t hurt, but it will be its idiosyncratic qualities that will make or break its listing hopes.”
Greg Martin, managing director at Rainmaker Securities, said the recent series of fintech IPO filings signal “a renewed investor appetite in the sector” but expressed caution about Wealthfront’s decision to go public as a smaller company.
“Wealthfront is thinly traded in the private markets, with scarce trades in the $1.4 (billion) to $1.7 billion valuation range,” he said. “It’s questionable whether Wealthfront has the financial heft to be a large enough public company, where you’d like to see at least a $3 billion market cap to have proper liquidity, coverage and trading to reap the benefits of being public. This IPO is best thought of as ‘marquee but fragile’ in a still-recovering sector.”
Wealthfront is a fintech company that started as a robo-adviser but is becoming more like a bank through its wealth management offerings such as an “Autopilot” tool for saving and investing, which it now refers to as an “automated savings plan.”
UBS initially made a deal to acquire Wealthfront for $1.4 billion in cash in January 2022, but the deal was terminated in September of that year. The Swiss bank instead purchased a $69.7 million financing note that is convertible into Wealthfront shares.
