Vestwell, a company that provides the infrastructure for employers to power workplace savings programs, has successfully raised $125 million in a “preempted” funding round. The investment was led by Lightspeed Venture Partners and saw participation from existing backers Fin Capital, Primary Venture Partners, and FinTech Collective, as well as new investors Blue Owl and HarbourVest.
Key Takeaway
Vestwell has raised
25 million in a “preempted” round of funding led by Lightspeed Venture Partners to support its mission of providing infrastructure for employers to power workplace savings programs.
Company Background and Funding
Founded in 2016 by CEO Aaron Schumm, Vestwell launched its cloud-native platform in 2017 and has raised a total of $227.5 million in funding with this latest round. The company declined to disclose its valuation, but it has experienced significant growth, achieving a three-year revenue growth of over 1,000% and projecting a further 100% growth in ARR and volume in 2023.
Partnerships and Expansion
Vestwell operates by partnering with financial institutions, state governments, and payroll companies to power workplace savings programs, including retirement, health, and education initiatives. The company’s platform has facilitated the savings of nearly $30 billion in assets over time and is used by over 1 million people working across 300,000 businesses.
As part of its growth strategy, Vestwell will use the new capital to expand its state-savings and other general savings program initiatives, enhance existing products, and develop new offerings. Approximately half of the funds will be allocated towards acquisitions, with the recent acquisition of student loans benefits provider Gradifi from Morgan Stanley being a notable example.
Future Outlook
Vestwell’s public-private partnerships with state governments have been instrumental in providing a personalized savings experience and have positioned the company as the leading partner in powering live state auto-IRA savings programs in the United States. With a workforce of just over 350 employees and plans for further expansion, Vestwell remains committed to its mission of revolutionizing the savings landscape in the US.
