Updated, 1:13 p.m. | With investments by other former Wall Street chieftains.
Sanford I. Weill, a silver-haired titan of Wall Street, sees a future for finance in Silicon Valley.
Mr. Weill, a former chief of Citigroup who built the bank into a behemoth through a series of deals, has invested in Level, a start-up in San Francisco that aims to make it easier for young people to manage their finances, the company announced on Thursday.
Mr. Weill’s investment is part of a $5 million financing round that was led by the venture capital firm Kleiner Perkins Caufield & Byers. Investors in the round include Blake R. Grossman, former chief executive of Barclays Global Investors, and Reed E. Hundt, former chairman of the Federal Communications Commission, the company said.
For Mr. Weill, a symbol of the Wall Street establishment, the investment represents a significant new direction. Level’s co-founder and chief executive, Jake Fuentes, said Mr. Weill viewed the start-up as part of a “next generation” of financial companies, catering to younger customers who can feel alienated by traditional banks.
“His perspective was that financial services need to change,” Mr. Fuentes said. “It’s a shift that is not going to come naturally or easily to the financial services industry, but it’s going to be a dramatic shift.”
Though that ethos of Silicon Valley-style disruption may not seem a natural fit for Mr. Weill, he recently made waves among his fellow Wall Streeters. He stunned them last year by saying that big banks should be broken up.
“I think the earlier model was right for that time,” Mr. Weill – who once supported a law that ushered in the age of the universal bank – said on CNBC last year. “I don’t think it’s right anymore.” (In a more recent interview, he added that banks do not necessarily need to be broken up if the “right regulation” is in place.)
Mr. Weill is the latest former Wall Street chieftain to back a finance start-up. Vikram S. Pandit, Citigroup’s chief until last year, invested recently in a student loan company called CommonBond. John J. Mack, the former chief of Morgan Stanley, is on the board of the peer-to-peer lender Lending Club, while the former chief executive of Wells Fargo, Richard M. Kovacevich, invested this year in another peer-to-peer lender, Daric.
With a new app that it unveiled on Thursday, Level is trying to appeal to the “millennial” generation, young adults starting their careers in an uncertain economy. The app, called Level Money, calculates a person’s available spending money on a given day, week or month, helping inform purchasing decisions.
Mr. Fuentes, a 27-year-old former Visa employee, teamed up with Frank Yeary, a onetime head of mergers and acquisitions at Citigroup, to start the company in June 2012. The connection to Mr. Weill came through Mr. Yeary, Mr. Fuentes said.
The two founders of Level met in 2007, when Mr. Fuentes was an intern at Citigroup in New York before his junior year at Stanford, he said. After leaving Citi the following year, Mr. Yeary went to the University of California, Berkeley, to advise top administrators as a vice chancellor.
Now Mr. Yeary, 50, is back in finance, focusing on the group known as Generation Y.
“Gen Y faces many very real financial challenges, and they are confronting these challenges far earlier than before,” Mr. Yeary, who is Level’s chairman, said in a statement. “In that environment, everyday financial choices are more important than ever.”
In connection with the latest investment, Mr. Hundt has joined Level’s board, along with Chi-Hua Chien, a partner at Kleiner Perkins.
Mr. Weill, 80, was traveling to the Middle East on Wednesday and could not be reached, a spokeswoman for Level said. But Mr. Fuentes said his company benefited from Mr. Weill’s support.
“He was one of the first people we started talking to and getting advice from,” Mr. Fuentes said. “Having someone who’s built a multibillion-dollar financial services institution but also recognizes the fact that his industry is going to change is enormous.”