Since its launch in 2016, Sallie Krawcheck's automated investing service has largely faced the challenge of slow growth.
Often referred to as a robo-advisor, Ellevest has struggled to grow to $2.4 billion in assets under management since its inception.
Now she must also face the challenge of leaving her position as CEO due to an undisclosed medical diagnosis.
In one message shared on LinkedIn this week, Krawcheck said Sylvia S. Kwan, her longtime colleague at Ellevest and the firm's CIO, would move into a co-CEO role with Connie Hsiung, its current COO and CFO.
Krawcheck will move into a board role and, according to the post, “provide guidance” as a board member, but will not be involved in the firm's day-to-day operations.
IN announcing its establishment in 2015Ellevest had already raised $10 million in seed funding. That seed round was led by Morningstar, with other high-profile investors including Allianz's Mohamed El-Erian, Mastercard CEO Ajay Banga and former Citigroup CEO Robert Druskin. IN March 2019, Ellevest announced it raised $33 million in Series A funding. Investors included Salesforce Ventures and more from Morningstar.
Krawcheck, a former president of Bank of America's global wealth and investment division, has had little trouble raising additional capital over the years.
In November 2020, Allianz Life Insurance Company of North America announced a $7.5 million investment in Ellevest, part of a $12.3 million extension of the startup's Series A funding round.
Ellevest surpassed $1 billion in AUM by January 2022 and announced a partnership with an investment from advisory technology provider Envestnet at the time.
Later, in April 2022, Ellevest announced a $53 million Series B funding round led by BMO and Contour Venture Partners. Returning investors included Melinda French Gates' Pivotal Ventures, Salesforce Ventures, PayPal Ventures, Allianz and Morningstar.
The firm hit the $2 billion AUM threshold in March.
In a special post on the Ellevest website this week, Krawcheck accurately states that the firm “is the only investment and wealth management company in the industry built by and for women,” but it's not the only one that has tried.
WorthFM, the robo-advisor launched in 2015 by Amanda Steinberg, the acclaimed founder of the popular DailyWorth personal finance newsletter for women, closed in 2018. Tina Powell, a former consultant who is now the head of community at Intention.ly, launched SheCapital in 2015, only to shut it down a year later.