The robo-adviser field grew quickly after 2008 financial crisis -- with big rounds of funding for players like Betterment, Wealthfront and Personal Capital. But lately, the appetite for such investments has cooled, with venture capitalists worried about a crowded market of over 200 robo-advisories in North America alone and incumbents who have started to copy elements of the robo model. Robo-advice has generated $2 billion in equity funding across 191 deals globally since 2013, according to CB Insights. But funding to wealth-tech startups has slowed more recently. To illustrate this trend, investments in the space dropped to $272 million in the third quarter of 2017, a figure almost 50 percent lower than the previous quarter. "The [robo-advisory] startup window began to close a couple of years ago, as some traditional players amped up their game to get into the robo space," said John Siciliano, managing director of asset management advisory and strategy lead at PwC. Legacy companies moved into the robo space by either buying or investing in robo-advisory startups, he said. Incumbents' moves are shown by a trail of acquisitions in recent years, including Invesco's purchase of Jemstep and Northwestern Mutual's acquisition of Learnvest last year, and Blackrock's acquisition of FutureAdvisor the year before. So the future profitability of a robo-adivsory platform is a less convincing sell. Another factor pulling venture capitalists' attention away from robo-advice is the evolution from the robo to hybrid model -- effectively, a "robo plus" model with digital advisory services complemented by a human-advice component. "For a robo-only model, and I'm generalizing here, they tend to have customers with smaller asset sizes and lower fees; if I were a venture capitalist, I would be looking at the long-term profitability," said April Rudin, chief executive and founder of wealth marketing strategy firm The Rudin Group. As a result, robo-advisory firms may need to look beyond venture capital funding to grow. "I think the venture ship has sailed [for robo-advice startups]," Siciliano said. "Now, the emerging robo players are those who already have capital or someone with capital who is willing to sponsor them." While some incumbent firms have developed their own robo-advisers (Morgan Stanley, Wells Fargo, Vanguard and Schwab, for example), others like Power Financial are investing in large robo-advisory startups like Canada-based Wealthsimple, which recently expanded to the U.S. and the U.K. "Unlike a lot of players in the space that have raised venture funding, we decided to go the strategic route," said Wealthsimple CEO Michael Katchen. "We've raised CA$100 million ($78 million) in capital from a company called Power Financial, which has built a big presence in financial services. They have got the capital to support us in this international push, and the expertise in building these sorts of organizations." Some in the venture capital community agree that scaling as a new entrant in the robo-advisory space is tough. Laviva Mazhar, senior analyst at Ferst Capital Partners, said early-stage robo-advisory firms face tough competition from corporate investor-backed companies, but also from financial institutions that have launched their own robo-advisers. She noted that the small number of early-stage Canadian robo-advisory startups that made it to the expansion stage (namely Nest Wealth and Wealthsimple) have benefited from recent strategic investments from large corporations. Corporate sponsorship adds more than just financial support, and also helps with the customer acquisition piece of the equation, too, said Maor Amar, managing partner of Impression Ventures, a seed investor in Wealthsimple. "The young upstart can achieve instant credibility within the marketplace because it's seen as having the explicit backing of a respected financial organization." Still, at least one Silicon Valley-based venture capitalist isn't giving up on robo-advisory startups. "The economic crash was the result of bad advice that was human-powered and not AI-powered," said Ryan Gilbert, a partner at Propel Venture Partners. "The critique is based on the high cost of customer acquisition, and my counter response would be that [the robo-adviser market] is not as saturated as the primary adviser market -- I'm focusing on the AI they've built, and what technology they've built to create a better solution for customers."