Modernizing Retirement with Generation Investment Management

Today, we’re pleased to share that we’ve raised over $80 million in a new round of capital, co-led by Generation Investment Management and Greyhound Capital, with participation from our existing investors, Tiger Global Management, Felicis Ventures, Propel Venture Partners, Lerer Hippeau, Xfund, and BoxGroup.

Less than five years ago, after coming up empty in an attempt to find a 401(k) that prioritized participant savings in a way that didn’t require a financial education to understand, my co-founders and I set out to create a retirement Americans can look forward to.

Fast forward to today and more than 13,000 small businesses trust us to manage more than $2.5 billion in retirement assets. In 2019, we ranked 7th overall in terms of new plans added for the year.

I’m proud of what we’ve accomplished and extremely grateful for all the hard work the team has put toward competing in an antiquated yet powerful sector of the U.S. economic system.

Why have we seen such quick adoption of our platform among small businesses? Incumbent 401(k) providers have historically avoided small businesses because they’re too difficult for them to turn a profit on—they’re not conducive to the asset-based fee model predominant in the industry.

This created a gap in the market that we’re on a mission to close using technology. And it’s not just about billing on assets—traditional providers outsource core components of their plans, resulting in excessive complicated and hidden fees, making them cost prohibitive for many businesses.

We built software to automate what’s usually outsourced, making pricing not just accessible for businesses of any kind, but affordable. And because we bill like a software company—with a flat monthly fee structure charged to the employer—our participants’ accounts are not put at an automatic growth disadvantage, which has historically been the case. Instead, from the beginning, growing participant retirement accounts is the primary objective of our platform (rather than our own profits).

I always look for conviction in our mission, what we’ve built, and what’s still to come, when evaluating partners for our business. When I asked Generation’s Shalini Rao to sum up her thinking behind the investment, here’s what she said:

For this next stage of our business, I couldn’t ask for better partners than Generation and Greyhound, as we further expand the platform to better serve the small business community and beyond.

I’m excited to pair their expertise with our own as we work to expand our partner ecosystem, integrate with more service providers that support the small businesses we work with, and dedicate even more resources to the needs of our participants. After all, we still have much more work to do.

According to our research, there are nearly 6 million small businesses in this country and 90 percent of them still do not offer their employees a 401(k). So, back to work we go.