Vestwell raises USD70m in Series C funding

Vestwell, a specialist in workplace savings and investing programmes, has raised USD70 million in a Series C financing round led by Wells Fargo Strategic Capital and Fin Venture Capital. A host of other financial services and fintech leaders also participated, including Goldman Sachs, Morgan Stanley, Manulife, Point72, Nationwide Ventures, Allianz Life Ventures, Northwestern Mutual, FinTech Collective, Greenspring Associates, Primary Venture Partners, Teamworthy Ventures, F-Prime Capital, Industry Ventures, and Commerce Ventures.

Vestwell provides the underlying infrastructure for workplace savings and investing programs, such as 401(k) and 403(b) retirement plans. The firm’s API-based technology is designed to support a diverse ecosystem of financial services and fintech companies from registered investment advisors and payroll providers, to banks, broker-dealers, credit unions, insurers, asset managers, and more. Through these partnerships, Vestwell is reshaping the industry by making quality workplace savings programs more accessible and affordable, particularly in the underserved small business market where accessibility and cost have traditionally been barriers to adoption.
 
“There are more than 31 million small businesses in the US, and many of them have historically experienced challenges in providing retirement benefits to employees due to the administrative burden and high costs," says Tom Richardson, head of Principal Technology Investments at Wells Fargo Strategic Capital. “Vestwell’s modern, automated, and user-friendly platform uniquely positions them to help small businesses provide workplace savings programs to more people. We’re excited to lead this investment and support Vestwell’s continued growth.”
 
Since launching in late 2017, Vestwell has continued to experience accelerated growth and market appetite. In 2020, despite the challenges of navigating a pandemic, the company saw plan growth of over 200 per cent. Vestwell began working as a small plan provider to help power thousands of plans for household names including Morgan Stanley and Voya, while integrating and partnering with payroll providers such as Toast, QuickBooks Payroll, Gusto, Rippling, and Paylocity. The funding news comes on the heels of Vestwell’s personalised managed account partnership with Franklin Templeton, as well as its expansion into state IRA savings programs alongside BNY Mellon.
 
“Vestwell was built for the financial services industry, and we’re backed by the financial services industry and the fintechs that work with them,” says Aaron Schumm, Founder and CEO of Vestwell. “From day one, our mission has been to create efficiency and accessibility in an industry hungry for change, and the fact that our peers are instilling their confidence in us to help define their future is both humbling and thrilling.”
 
This latest round of financing will be used to further expand the team, platform functionality, and servicing for Vestwell’s thousands of partners and clients. The focus will remain on leveraging the core infrastructure of its record-keeping technology to expand into other workplace savings program areas such as 529s, HSAs, emergency savings, and IRAs.