Good tidings for Vestwell came just before Christmas with news that the digital retirement plan platform and recordkeeper raised $125 million in Series D funding. The company claimed the size of the round was one of the largest Series D SaaS of the year.
A letter-style press release from Vestwell Founder and CEO Aaron Schumm mentioned the “investors who share our vision of closing the American savings gap,” including Lightspeed Venture Partners, Fin Capital, FinTech Collective, Primary Ventures, Blue Owl, and HarbourVest.
“Seven years ago, we set out to support the American workforce, half of whom do not have access to retirement savings, and transform the antiquated savings industry through innovative technology solutions,” Schumm wrote. “We’re making a tangible difference in people’s lives, working to close the savings gap daily. Our vision and impact are not going unnoticed.”
He added that the firm administers 80% of the country’s state auto-IRA savings programs, announcing Delaware as the latest earlier in December, as well as nearly $30 billion in assets in all 50 states.
The news comes after fintech firm Pontera announced $60 million in funding a week earlier. The firm enables 401(k) participants to receive comprehensive wealth management services by personal financial advisors, something increasingly seen (and demanded) within the retirement plan industry.
The round raises Pontera’s total funding to $160 million, which it says reinforces “its commitment to address the widespread neglect of workplace retirement accounts held by 85 million Americans—a critical element of the U.S. retirement crisis.”
“After more than quadrupling revenue since its last fundraise announced in February 2022, Pontera welcomed ICONIQ Growth as a new investor in an up round with additional participation from previous investors Blumberg Capital, Collaborative Fund, Hanaco Ventures, Lightspeed Venture Partners, and The Founders Kitchen,” according to the company.
It claimed that “studies have consistently shown that the majority of 401(k) plan participants desire more comprehensive assistance with retirement planning and that a professionally managed portfolio can generate up to 4% additional annual net returns.”
