Bestwell, which provides infrastructure for employers to promote workplace savings programs, has raised $125 million in what the company calls a “pre-emptive” funding round.
Lightspeed Venture Partners led the round, with participation from existing backers Fin Capital, Primary Venture Partners, and FinTech Collective, as well as new investors Blue Owl and HarbourVest.
The New York-based fintech company declined to reveal its valuation.
As part of this round, Justin Overdorff, Lightspeed’s lead fintech partner, joined Vestwell’s board of directors.
bestwell CEO Aaron Schumm founded the company in 2016 and launched its cloud-native platform in 2017. In this latest round, he raised $227.5 million.
Shumm declined to provide specific revenue numbers, but told TechCrunch via email that the startup: “We achieved revenue growth of over 1,000% in three years.”
“ARR and sales will also increase by more than 100% in 2023,” Schumm said, noting that the company is “on the path to profitability in the near term.”
bestwellHe added, “Prior to this pre-empted Series D funding, it was funded through profitability.” The company’s last raise was a $70 million Series C round in 2021.
More than 1 million employees at 300,000 companies use the Vestwell platform, which the company says has contributed to nearly $30 billion in asset savings over time. The company operates in partnership with financial institutions such as Morgan Stanley and JPMorgan, state governments, and payroll companies, and generates revenue for Bestwell through per-employer or “per-saver” monthly fees. . Bestwell says that as a partner extension, it enables an array of programs that include retirement, health, and education, including 401(k), 403(b), IRA, 529 Education, ABLE disability programs, and emergency savings programs. There is.
Earlier this year, JPMorgan used Bestwell to expand its 401(k) product.
“We help these companies migrate away from outdated legacy platforms, giving them a competitive edge when entering severely underserved markets,” Schum said. states.
Schum said Bestwell’s public-private partnerships are increasingly driving the company’s business by giving state governments a way to provide a “personalized savings experience.”
“We are now a leading partner in this space, currently powering 80% of the Live State Auto IRA savings programs in this country,” he said.
The company will use the new funding to expand its National Savings and other public savings program initiatives, enhance existing products and develop new products. About half of the new funding will go toward acquisitions, Schumm said. July, Bestwell Acquires student loan benefit provider Gradifi It was acquired from Morgan Stanley for an undisclosed amount.
Vestwell has just over 350 employees and has grown its team size by approximately 40% in the last year.
Lightspeed’s Oberdorf said the company was “deeply impressed with Bestwell” and impressed by the company’s “groundbreaking infrastructure-first approach to solving America’s systemic savings problem.” He said he received it.
“They are undeniably a dominant player and a true disruptor when it comes to the world of savings. Lightspeed is excited about our investment. I am proud to join the board and look forward to accelerating this I look forward to working closely with Aaron and his team to bring the company together. ”
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Source: techcrunch.com
