Capitalize Raises $12.5 Million To Help People Roll Over Old 401k Accounts

By Amit Chowdhry ● Feb 11, 2021
  • Capitalize — a company that helps consumers transfer retirement assets — recently announced the closing of a $12.5 million Series A investment round.

Capitalize — a company that helps consumers transfer retirement assets — recently announced the closing of a $12.5 million Series A investment round. Canapi Ventures led the round with participation from Capitalize’s existing investors including Bling Capital, Greycroft, RRE Ventures, and Walkabout Ventures.

This new round of funding will drive continued growth, support strategic investment in talent, and enable Capitalize to add new services as it helps consumers save for retirement nationwide.

Capitalize has built the first and only online platform for consumers to roll over and consolidate legacy retirement accounts like 401ks. And over 15 million 401k account holders change jobs each year, the majority of whom either cash out or leave their assets behind for an extended period of time due to the historically complicated rollover process – creating growing gaps in the $20 trillion retirement savings market. 

The company’s unique mix of proprietary technology and leading customer service helps users instantly locate misplaced 401k accounts, select and open individual retirement accounts (IRAs) at leading financial institutions, and initiate rollovers on their behalf for free. 

And by helping terminated employees roll over 401ks at the time of job change, Capitalize enables individuals to keep track of their savings and helps employers lower administrative fees and fiduciary risk. Plus the company has partnered with leading financial institutions to offer IRAs on its platform as well as with a number of employers and HR platforms to offer its service to former and departing employees. 

The company has a clear path to continued growth by automating the $500 billion of 401k-to-IRA rollovers that take place each year. Since its launch in September 2020, the company has helped individuals transfer almost $10 million in retirement assets.

KEY QUOTES:

“We’re making it easier for all Americans to save for retirement as they move through their careers. Each year, more than $20 billion in retirement savings is lost to taxes and penalties due to an inefficient rollover system, with millions of additional retirement accounts left behind when people change jobs. We’re thrilled at the progress we’ve made since our launch, only months ago, and by the trust of our users and partners. This Series A financing enables us to reach more consumers, significantly expand our team and offer new services to help our users save for retirement. We couldn’t be more excited to have partners like Canapi on board as we help more Americans get their retirement savings on track.”

— Gaurav Sharma, Co-Founder and CEO of Capitalize

“The retirement savings process has been riddled with inefficiencies and relatively untouched by technology for far too long. Capitalize is solving a critical need for so many Americans and has already made impressive strides doing so. Many of our bank LPs offer digital IRA products, and Capitalize’s offering will enhance their customer experience while enabling them to grow AUM. We are excited by the market receptivity to their product, and we’re looking forward to helping the team unlock substantial opportunities for growth.”

— Jeffrey Reitman, Partner at Canapi Ventures