Nutmeg Raises $5.3M From Pentech, Tim Draper To Make Financial Management Less Stuffy

Nutmeg, the U.K. ‘online investment manager’ that aims to take the complexity out of financial products, has raised a £3.4m ($5.3m) VC round led by Pentech and Daniel Aegerter, the Swiss chairman of Armada Investment Group.

But perhaps more headline-grabbing is that legendary Silicon Valley investor Tim Draper also participated. Draper is probably best known for investing in Hotmail, as well as being an early investor in Skype in Europe, along with many, many other startups.

European Investor Klaus Hommels (who notably sits on Spotify’s board) also joined the round.

Nutmeg, which is gearing up for a U.K. launch this summer, says it wants to “democratise the stuffy world of financial management”, which, lets face it, can be mind-bogglingly complex for outsiders. It does this through a neat web-based UI that tries to align any savings and investments with a user’s “life goals” without the need for them to get as involved as actually picking out stocks themselves or paying for financial advice.

Of course, there’s no such thing as free financial advice, even if it’s partially algorithmically driven and Nutmeg’s revenue model is based on an annual management fee set at 1 per cent (including VAT) or less. Additionally, “by collecting nutmegs, a loyalty scheme based around referrals and pounds invested, users can reduce their management fees to as low as 0.3 per cent”, says the company.

In a canned statement, Craig Anderson, a partner at Pentech, says “I believe Nutmeg will do nothing less than re-define the entire world of investment management”.

That’s the “entire world” folks. We’ll be watching.