The company, which uses sophisticated software to analyze and dispense advice on 401k investment plans, last week closed an $85 million fifth round of financing, its largest by a mile. So far, Financial Engines has raised $122 million since it was founded in 1996 but has maintained a low profile until recently.

Company officials decline to say anything about a public offering. But don't be surprised to see them file within the next few weeks for a hefty IPO in early 2000. "There's no question that they're saying 'here we are' to the world even though they can't acknowledge IPO plans," says Forrester analyst Jaime Punishill.

The company's roster of investors, lead by Oak Hill Capital Partners, is a Who's Who of heavy hitters who invest in venture funds in hopes of triple-digit IPO returns. They are American International Group, Chase Manhattan, Chase H&Q, ETrade, Goldman Sachs, Intel, Merrill Lynch, Thomas Weisel Partners, State Street Global Advisors, Washington Mutual, and Wells Fargo.

WHAT'S IN A NAME?Even without these names, Financial Engines would carry its weight on Wall Street. Cofounder and chairman Bill Sharpe was awarded the 1990 Nobel Prize in Economics. Cofounder and board member Joseph Grundfest was former commissioner of the Securities and Exchange Commission. Craig Johnson, the other cofounder, is also founder and chairman of the Venture Law Group.

As the story goes, Mr. Sharpe and Mr. Grundfest hatched their idea over a cup of coffee at Stanford University's student union and pulled in Mr. Johnson to make it a reality. It took them six months to fine-tune their idea and raise $4.5 million in funding from New Enterprise Associates and Foundation Capital, and then they were off to the races. They launched their first product last year.

CUSTOMIZED ADVICEFinancial Engines sells its service to companies that pay a startup fee of anywhere from $2,500 to $50,000 and an annual fee of $30 to $50 per 401k enrollee. The software analyzes variables of plan-holders -- such as salary, age, income, and other investments; it even looks at global economics -- to recommend the best mutual funds for individuals.

Financial Engines's current customers include several Fortune 500 companies, including 3Com and Merck. The company also has its foot in the door with 401k plan providers who serve about half of the 40 million 401k plan holders in the United States, says Christopher Jones, Financial Engines's vice president of financial service and strategy. These include State Street, Merrill Lynch, Hewitt Associates, Northern Trust, Prudential, Scudder, and Alliance Benefit.

These providers are not legally able to sell the Financial Engines service because of fiduciary laws. But Mr. Jones and industry analysts say the plan providers have an incentive to recommend the service to their corporate clients.

"Financial Engines has a powerful tool for 401k providers to retain their customers," says Jupiter Communications analyst Robert Sterling. Mr. Sterling believes that employees will have a decision-making edge with Financial Engines's analysis tools. Those who quit their jobs, he says, will more likely keep their 401k plans intact rather than rolling them over to different plans that don't offer the service.

EDGING IN ON THE INVESTORS' EDGE?Another avenue of potential business comes from the current crop of investors. "We're pursuing an active dialogue with the company," says Tom Bevilacqua, executive vice president of corporate development and strategic investments at ETrade. He notes that because ETrade is the only pure-play online company among the investors, the Web-based stock-trading firm would like to add Financial Engines to its crop of customer services by offering it free or at a discount.

Financial Engines began attacking the retail market in June by attempting to sell to individuals and started a print and radio ad campaign just last month. It is charging $15 per quarter per individual for advice on 401k plans and will expand the service to individual retirement accounts and other long-term investment next year, says Mr. Jones. A person who pays for the service will get detailed information that tells him or her the best way to invest in his or her 401k plan.

The average 401k account is worth about $40,000. But whether many individuals will be willing to pay $60 a year for advice on which mutual funds to buy and sell for such an account is still unclear. "The institutional approach will be the most popular way of accessing financial engines," says Mr. Sterling diplomatically.

But even in the retail realm, Financial Engines is building powerful alliances. For example, America Online will integrate some of Financial Engines's simulation technology into its portfolio tracker, giving the provider a shot at AOL's huge customer base.

Financial Engines also has a third piece of business. It offers analytical advice to large traditional pension plans at companies such as AT&T and Hewlett-Packard, and public funds such as California Public Employees Retirement System.

MANY PIECES, SMALL PIEDespite the great potential, Financial Engines has competitors. They include mPower (formerly called 401k Forum), Rational Investors, and Direct Advice.

Forrester's Mr. Punishill says the industry currently serves only about 150,000 workers with 401k plans. But he expects that figure to climb to around 2 million -- of 40 million total workers using such plans -- in 2002. And he thinks Financial Engines will be among the biggest players, if not the biggest.

With 2 million customers paying an average of $40 a year, the market would be $80 million. But that's not much for an entire industry. Even if Financial Engines captures half of that itself, it's still a trickle of a revenue stream for a company that likely will have a stock market value of several billion when it goes public, based on the performance of other recent highly touted offerings.

But compare Financial Engines to companies such as Internet retailers that have even lower revenues and a fraction of the profit-margin potential. All things considered, Financial Engines just might be a multibillion-dollar bargain.