Yodlee Says It Has Reached Less Than 5% of Its Market

  • Philip Ryan
  • May 10, 2016
  • 2

© Can Stock Photo Inc. / iDesignYodlee, now part of Envestnet, sees huge opportunities ahead in the wealth management space. Furthermore, Yodlees says it serves only 5% of its addressable market in its core businesses of personal financial management and data aggregation.

Envestnet CEO Judson T. Bergman stressed the importance of cross-selling between Yodlee and Envestnet customers on yesterday’s earnings call, and called out on an early win:

And an early example of success in cross-selling, even before we are fully rolled out, we have our first executed agreement between Yodlee and an existing Envestnet client. United Capital recently announced that Yodlee will power their FlexScore solution with data aggregation….

We look forward to Envestnet’s advisors, introducing them to Yodlee’s capabilities and Yodlee’s clients to the breadth and depth of Envestnet’s cloud-based technology offering, as these industry experts seek to deliver better outcomes for their clients.

Anil Arora, Yodlee’s CEO and a vice president of Envestnet, was asked about pricing levers for subscriptions to Yodlee’s services. Arora answered:

The key drivers of subscription revenue are users, and then revenue per user, so pricing if you may. And we can toggle between the two of them and we have quarter-to-quarter. We did see a slight increase in revenue per user year-over-year, but our primary focus has really been on growing the user base because we believe that the target addressable market is very large and our current penetration is less than 5%.

So, in terms of priorities in the next two years, three years we see a primary focus to grow with new customers, grow end-users and we may opportunistically grow pricing, but that’s a secondary priority.

Arora later expanded on this, noting that the wealth management space is going to be a focus for Yodlee:

I think we’re all now going into a phase where expectations are raised, standards are raised, and the opportunity that’s created for advisors is much greater in terms of what services, and planning and advice, and personal financial management and other tools we can provide to an advisor’s client.

So, it’s a massive opportunity. I think we’re in the very very early, early stages of pursuing this opportunity. And to me, it is yet another validation, as you pointed out. We too have seen, as Jud mentioned, emerging and strong demand for aggregation, personal financial management, many of the tools. But, we are in the very early stages of the game right now.

In other words, the synergy between Envestnet and Yodlee is seemingly significant and growing. Adjusted EBITDA in 1Q was $19.2 million, a 14% increase year over year.

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Philip Ryan is Senior Editor of Bank Innovation and Senior Director of INV Fintech. He began covering financial services in 2012 and has more than 15 years' experience in online journalism. He can be reached at pryan@royalmedia.com.

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