In response to “strong customer demand” in spite of the COVID-19 crisis, Human Interest, a startup 401k provider focused on the small- to medium-sized business (SMB) market, is raising additional capital.
San Francisco-based Human Interest announced May 20 that it is upsizing its Series C financing to $50 million. The extension, led by Glynn Capital, comes just over a month after the company announced a $40 million Series C, which was the largest raise in its history and for any startup 401k provider, the company says.
“In the past two months, we’ve continued to add customers and grow assets, which is part of what prompted us to raise the additional capital. We are seeing some of the strongest sales months in the company’s history, and are seeing 2-3X year-over-year growth in customer acquisition even in the midst of the COVID-19 crisis,” said Human Interest CEO Jeff Schneble.
“The pandemic is causing many of us to re-examine our finances, including ensuring a way to invest for our future. That’s why, even in the past few months, we’re seeing that employers are still rolling out new retirement plans and employees are still saving,” Schneble continued. “It’s encouraging to see that, even with current market volatility and widespread unemployment, nearly 100% of our customers have stayed with their investment strategy and have not withdrawn assets. This is a critical time for the financial industry, and we are committed to helping SMB employees stay the course to reach their future financial goals, including a secure retirement.”
The 401k provider, which was recently named one of America’s Best Startup Employers by Forbes and recognized among the Best Places to Work in the Bay Area by the San Francisco Business Times, has also pledged to have no layoffs in 2020. In fact, the company is opening new positions and actively hiring.
“We think Human Interest has the potential to help a significant number of people not just now but as they build their savings for years to come,” said Charlie Friedland, Principal at Glynn Capital. “We believe Human Interest is taking an innovative approach to addressing the lack of appropriate access to retirement savings, a major and growing issue.”
Human Interest says the additional capital will help double its engineering team by July 2020 in order to deepen the investment in technology that it says can make retirement benefits even more accessible to SMBs.
“Our mission to ensure that people in all lines of work have access to high-quality retirement benefits feels even more important in this climate as we work to help employees of SMBs—roughly half of the American workforce—save and know their employer is invested in their financial futures,” Schneble said.
Human Interest, founded in 2015 as Captain401 at Y Combinator and renamed in mid-2018, says to date it has helped more than 60,000 employees save for retirement at over 2,000 companies.