Vestwell raises $125M to assist companies energy office financial savings packages

Vestwell, which offers the infrastructure for employers to energy office financial savings packages, has raised $125 million in what the corporate describes as a “preempted” spherical of funding.

Lightspeed Enterprise Companions led the spherical, which included participation from present backers Fin Capital, Main Enterprise Companions and FinTech Collective, in addition to new buyers Blue Owl and HarbourVest.

The New York-based fintech declined to disclose its valuation.

As a part of the spherical, Lightspeed’s lead fintech accomplice, Justin Overdorff, has joined Vestwell’s board of administrators. 

Vestwell CEO Aaron Schumm began the corporate in 2016 and launched the cloud-native platform in 2017. It has raised $227.5 million in funding with this newest spherical.

Whereas Schumm declined to disclose arduous income figures, he instructed TechCrunch through electronic mail that the startup had “achieved a three-year revenue growth of over 1,000%.”

“We will also grow our ARR and volume by more than 100% in 2023,” Schumm stated, noting that the corporate was “on a near-term path to profitability.”

Vestwell, he added, was “funded through profitability prior to this preempted Series D funding.” The corporate’s final elevate was a $70 million Sequence C spherical in 2021.

Over 1 million folks working throughout 300,000 companies use the Vestwell platform, which the corporate stated has helped energy the financial savings of practically $30 billion in belongings over time. The corporate operates by partnering with monetary establishments akin to Morgan Stanley and JPMorgan, state governments and payroll firms, which generate income for Vestwell through a month-to-month per-employer or “per-saver” charge. As an extension of its companions, Vestwell says it allows a collection of packages, together with retirement, well being and training, akin to 401(okay), 403(b), IRA, 529 Training, ABLE incapacity and Emergency Financial savings packages. 

Earlier this yr, JP Morgan had tapped Vestwell to broaden its 401(okay) product.

“We empower these businesses to increase their competitive edge in reaching a significantly underserved market by helping them move on from outdated legacy platforms,” Schumm stated.

Vestwell’s public-private partnerships are more and more producing extra enterprise for the corporate by giving state governments a approach to supply “a personalized savings experience,” in accordance with Schumm.

“We’re now the leading partner in this field, and currently power 80% of the live state auto-IRA savings programs in this country,” he stated.

The corporate will use the brand new capital to broaden its state-savings and different normal financial savings program initiatives and to boost present and develop new merchandise. About half of the brand new funds will go towards acquisitions, in accordance with Schumm. In July, Vestwell acquired student loans benefits provider Gradifi from Morgan Stanley for an undisclosed quantity.

Vestwell has simply over 350 workers, and has grown its staff by round 40% over the past yr.

Lightspeed’s Overdorff stated his agency was “deeply impressed by Vestwell” and its “groundbreaking infrastructure-first approach to solving the systemic savings problem in the US.”

“They’re undeniably the dominant player and a true disruptor when it comes to the savings landscape – Lightspeed is excited to invest, and I’m proud to be joining the board and look forward to working closely alongside Aaron and his team to accelerate this company together.”

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