California Leads the Charge in US WealthTech Despite 2024 Investment Decline

California Leads the Charge in US WealthTech Despite 2024 Investment Decline

In 2024, the US WealthTech industry experienced a dramatic decline in investment activity, with deal volume dropping by 70% year-over-year. This downturn reflects the ongoing challenges faced by the sector, as it struggles to retain investor interest amidst changing market conditions.

Declining Investment Activity in the US WealthTech Market

The US WealthTech landscape witnessed a significant contraction in both funding and deal activity in 2024 compared to previous years. Key statistics include:

  • Total funding decreased to $8.2 billion in 2024, a 65% drop from $23.1 billion in 2023.
  • Deal activity fell to 572 deals, a staggering 70% reduction from 1,937 deals in 2023.
  • Comparatively, the number of deals has decreased by 79% from 2,668 deals in 2020.

These figures illustrate the sector’s struggle to maintain momentum and investor confidence, indicating a retreat from the peak levels seen in prior years.

California’s Dominance in WealthTech Deals

Despite the overall downturn, California continued to lead the US WealthTech market, securing a 28% share of the deals with a total of 158 completed transactions. However, this marks a significant 71% decline from the 550 deals recorded in 2023. Other states showed the following trends:

  • New York: Retained the second position with 96 deals (17% share), down 69% from 309 deals in 2023.
  • Texas: Maintained third place with 39 deals (7% share), reflecting a 72% decline from 138 deals in 2023.

These statistics emphasize California’s continued prominence in the WealthTech sector, while New York and Texas mirror the overall downward trend.

Nassau’s Major Deal in the WealthTech Sector

One of the most notable transactions in 2024 was a $200 million minority equity investment in Nassau, a digitally-driven provider of fixed annuities and asset management solutions, by Golub Capital. This deal stands out as one of the largest in the US WealthTech arena.

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Leveraging advanced digital capabilities, Nassau offers customizable retirement solutions and innovative investment strategies, including:

  • Public and private debt
  • CLOs (Collateralized Loan Obligations)
  • Alternative investments

This strategic partnership not only reinforces Nassau’s financial standing but also enhances its access to Golub’s middle-market direct lending strategies, enabling it to deliver tailored, capital-efficient solutions. With $24 billion in assets under management, Nassau is poised to continue its growth trajectory in the WealthTech space, providing cutting-edge financial products to insurers and third-party clients alike.

For more insights on the WealthTech industry, visit Wealth Management.

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