401GO, a next-generation retirement plan provider for employers, advisors, and individuals, announced the completion of its $12 million Series A funding round led by Next Frontier Capital. Additional investors include Rally Ventures, which joined existing investors Impression Ventures and Stout Street Capital.
The latest funding round will enhance the next stage of the company’s growth and advance its mission to enhance retirement savings through its blend of advanced technological solutions with a high-touch, advisor-based model. Along with supporting its existing 401(k) and IRA platforms, 401GO will enhance and add capabilities to its embedded financial wellness platform and set a roadmap to launch new products like Health Savings Accounts (HSAs) and Emergency Savings Accounts (ESAs), over the next 12-24 months.
401GO plans to more than double its headcount to employ over 110 people over the next two years, adding positions in all business areas but with a particular focus on software development and sales.
Launched in 2019, 401GO has seen steady growth since its inception, averaging 250% year-over-year revenue growth over the last three years. The company now serves over 2,500 businesses, totaling over 30,000 active users. And in November 2023, 401GO launched GO-IRA, an IRA offering that enables for a hassle-free rollover of 401(k) investments within the 401GO platform, improving portability of retirement savings for employees who switch employers.
The company’s focus on helping employees early in their careers save for their first retirement investment is validated by data from its platform showing a 51% retirement plan participation rate among the youngest quartile of employees—more than double the industry average.
Richard Harjes from Next Frontier Capital and Tom Peterson from Rally Ventures will join the 401GO Board of Directors.
KEY QUOTES:
“This new funding underscores the confidence our valued investors have in 401GO’s strategic vision and execution, as well as its dedication to reshaping the retirement savings industry through a combination of cutting-edge technology and personalized service. Building a modern platform from the ground up that would enable businesses of any size to offer a retirement plan has been a challenging and arduous task. We didn’t cut corners or dress up old legacy tech, which takes more time and patience. Fortunately, we’ve aligned with investors that appreciate our unique approach and sustainable growth model and with these funds, we’ll be able to scale our already strong growth.”
– Daniel Beck, Co-Founder and CEO of 401GO
“We have followed 401GO for a couple years now, and are excited about the efficient way they are working to serve the millions of Americans working in small to mid-sized businesses with historically low access to employer-based retirement benefits. 401GO has architected an innovative technical solution with great customer support and quick on-boarding, while retaining 401k plan sophistication and the flexibility to work with independent financial advisors offering rich investment options. Recent regulatory changes, including 2022’s Secure 2.0 legislation, encourage more firms to offer 401k plans and play to 401GO’s strengths. Next Frontier Capital is proud to support Daniel and the 401GO team in their mission to improve the retirement outlook of its customers.”
– Richard Harjes, Co-Founder and General Partner of Next Frontier Capital
