San Francisco-based Human Interest, a 401(k) provider catering to small- and medium-sized businesses, has effectively doubled its valuation from its financing a few months prior thanks to the recent announcement of a hefty $55 million capstone to its Series C funding.
Led by Glynn Capital, an existing investor, with participation by new investor NewView Capital, the additional financing brings the round to $105 million and Human Interest’s total funding to $136.7 million.
The investment comes on the heels of an extraordinary year for Human Interest. The company reported 10X growth in monthly customer acquisition over the past 18 months, and revenue retention rates that exceeded even those of top performers in a recent industry study.
The company has reportedly gone from adding about $100,000 a month in net new revenue in early 2019 to now adding more than $1 million a month in net new revenue, with a goal of getting to over $2 million a month by the end of 2021.
Human Interest CEO Jeff Schneble told TechCrunch the company’s goal is to get to $100 million-plus ARR [annual recurring revenue] in the next three years so it can go public in the next three to four years.
Human Interest also unveiled a new brand, eliminated more than 20 401(k) transaction fees and launched new offerings, Complete and Concierge, to simplify retirement plan administration and make retirement savings more accessible to people in all lines of work.
“If we want to close America’s $28 trillion retirement savings gap, then we have to make it easier for small- and medium-sized businesses to offer retirement savings plans, and we have to make saving automatic for employees. With every step, we’re getting closer to that vision,” Schneble said in a statement announcing the news.
Human Interest, which has grown from about 100 employees a year ago to about 300 today, will use the new funding to double the size of its engineering team and scale its unique technology platform and operations.
“The big incumbents haven’t figured out how to make plans affordable and accessible for smaller companies,” Schneble said. “We knew that to make a permanent dent in this country’s retirement crisis, we had to do something different.”
That “something different,” Schneble said, was in-house, end-to-end technology that has transformed the economics of Human Interest’s business, enabling it to double its margins over the past six months while eliminating transaction fees for plan administrators and participants.
“We rethought the 401(k) model from the ground up and built a unified technology platform that allowed us to deliver a complete solution to SMBs at a fraction of the price charged by legacy providers,” Schneble said. “We passed this savings on to our customers, allowing us to deliver a user experience, technology platform, and brand that differentiates us and meets a tremendous unmet need for both employers and employees.”
Those efficiencies explain why Human Interest is enrolling more plans per month than the largest incumbent, said Glynn Capital principal Charlie Friedland. “We believe that Human Interest’s platform gives it a structural advantage over every other 401(k) provider in the SMB market,” Friedland said. “Where competitors are burning capital with every new customer, Human Interest has a clear path to long-term success.”
Founded in 2015, Human Interest has quickly grown by partnering with over 400 brokers, financial advisors and payroll companies, offering a full-service alternative for small and medium-sized businesses. Human Interest said it plans to increase its partner base to over 1,000 by the end of 2021.
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Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
