Wealthfront Notches $2.6B Valuation in Uneventful Public Debut

Wealthfront WLTH closed out a tepid first day of trading at $14.19 a share, essentially flat on its IPO share price of $14.

The public listing by the digital financial adviser, founded in 2008, comes at the end of a roller coaster year for IPOs in the US. Events such as President Donald Trump’s tariff announcement in April and the government’s weekslong shutdown in the fall resulted in less IPO activity than investors had initially hoped for.

Wealthfront and its shareholders sold about $486 million of stock through the offering. The robo-adviser’s fully diluted market cap was about $2.6 billion. It priced its IPO at the high end of its target pricing range of $12 to $14 per share.

The stock began trading at $14 and went as high as $14.56 during the day.

About 13 million of the 34.6 million shares in the offering came from existing shareholders. The higher-than-usual secondary allocation comes as VCs continue to chase liquidity. Wealthfront last raised $69.7 million at a post-money valuation of $1.4 billion in September 2022.

Major existing Wealthfront investors include Tiger Global, which owned about 19.7% of the company before the offering, according to regulatory filings. DAG Ventures owned 12.3%, while Index Ventures had 11.5% and Ribbit Capital had an 8.8% stake.

The stock’s performance in its Nasdaq debut was rather uneventful compared with other IPOs this year. Navan and StubHub each slipped on their first days of trading and remain below their IPO pricing.

Meanwhile, others such as Circle CRCL booked big first-day stock gains and are still trading far above their listing price.

Wealthfront, which runs quantitatively rebalanced portfolios for retail and institutional clients, last disclosed $88 billion in customer assets. More than of that was in cash. The company, which invests in stocks and bonds, also offers cash management and portfolio-collateralized lending.

Interest income from its high-yield cash products accounts for a significant portion of Wealthfront’s revenue, per its disclosures.

In 2022, the company agreed to sell to UBS UBS at a $1.4 billion valuation, but the deal fell through.