Top-rated1 SMB 401(k) provider Human Interest today announced that it has raised a $200M Series D round led by The Rise Fund, TPG's global impact investing platform, and joined by SoftBank Vision Fund 2*.
The round comes just six months after the completion of Human Interest’s Series C, bringing the total amount raised over the last 12 months to $305M and valuing the company at $1B. The financing included participation from new investor Crosslink Capital and existing investors NewView Capital, Glynn Capital, U.S. Venture Partners, Wing Venture Capital, Uncork Capital, Slow Capital, Susa Ventures, and others. Human Interest also announced the appointment of Chief Financial Officer Mike Armsby, former CFO at Personal Capital and Yodlee, who brings public company experience as Human Interest prepares for its IPO.
The funding reflects the gravity of the retirement savings crisis and Human Interest’s progress in addressing one of the most critical problems in our country. The Rise Fund determined that Human Interest has the potential to deliver outsized societal impact by helping SMB workers build retirement savings that significantly outpace what they would be able to save without an employer-sponsored plan. By making retirement plans accessible, affordable, and easy to use, Human Interest is creating a path to a secure financial future for people in all lines of work.
While 31.7 million SMBs in America make up the majority of businesses,2 only 14% of companies with fewer than 100 employees offer retirement benefits,3 and 74% of people near retirement do not feel they have enough saved.4 Human Interest is eliminating barriers that have kept SMBs and their employees from adopting retirement plans in addition to offering several advantages over legacy providers:
Increased participation rate: Eligible employees with Human Interest 401(k)s have 2x the industry average participation rate as a result of a streamlined onboarding experience and built-in investment advising.5
Eliminated transaction fees: Human Interest was the first 401(k) provider to
eliminate transaction fees, doing so for both participants and plan sponsors.
Reduced costs for employers and employees: By using technology to automate 401(k) plan onboarding and administration, Human Interest offers a complete solution at a fraction of the price charged by legacy providers. The cost of a Human Interest 401(k) plan is 40%+ lower than the industry average.
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“Promoting financial health is a core investment pillar for The Rise Fund. Human Interest delivers one of the most compelling solutions to the persistent problem that roughly half of Americans will not have enough savings when they reach retirement age,” said Maya Chorengel, Co-Managing Partner at The Rise Fund. “Despite recent legislation, primarily at the state level, legacy programs have not, to date, produced the same participant outcomes as Human Interest.7 We are proud to join Human Interest in its mission to empower more Americans to save for retirement.”
The company is seeing strong adoption in verticals that have not had retirement benefits, including construction, retail, manufacturing, restaurants, nonprofits, and hospitality. For example, over the past 3 quarters, Human Interest has seen 4.5x customer growth in the restaurant sector. Since the start of the pandemic, Human Interest has experienced 2x higher enrollment growth among hourly workers than salaried workers, and hourly worker assets have tripled.
“Without Human Interest, millions of employees, especially those below the 70th percentile in income, would never have access to a retirement account from their employer,” said John Flynn, Partner at TPG. “Human Interest is poised to have significant societal benefit, specifically for the employees of their customers. In addition, the company has a very attractive, predictable, and scalable business model due to their early investments in advanced technology and automation.”
“The need for a simple, affordable retirement benefit for employers and employees is clear,” said Jeff Schneble, CEO of Human Interest. “Sales have tripled over the last year. Our priority with this funding is to fulfil customer demand by advancing our product and dramatically scaling our team.”
The company will be making significant investments to expand its already vast network of integrations and partnerships with financial advisors, benefits brokers, and payroll companies. "By headcount, we more than doubled in size over the last 12 months to 350 employees and we’ll add another 200 employees nationwide by the end of 2021, primarily in our product, engineering, and revenue teams,” said Schneble.
For more information: GlobeNewsWire
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The Human Interest Team
We believe that everyone deserves access to a secure financial future, which is why we make it easy to provide a 401(k) to your employees. Human Interest offers a low-cost 401(k) with automated administration, built-in investment education, and integration with leading payroll providers.