CollegeBacker, a U.S.-based social savings platform for digital investment advice to 529 plans, announced on Wednesday it not only has changed its name to Backer but has also raised $8.4 million in venture capital. According to Backer, the funding round was led by Crosslink Capital with participation from Rally Ventures, Correlation Ventures, and Expansion Ventures. Jim Feuille, an early investor and board member at Chime, Pandora, and Personal Capital, has joined the Backer board.
Founded in 2016, Backer describes itself as a social savings platform that helps people create tax-free 529 accounts for their children, provides investment guidance, and allows family and friends to contribute with ease. Backer founder and CEO, Jordan Lee, shared more details about the company by stating:
“We started with a social college fund powered by a 529 plan because parents were clamoring for a more modern way to save. As Backer, we will continue to propel the 529 industry forward technologically and support our families in new ways, making it easy to help loved ones arrive at life’s biggest milestones with financial security.”
Backer further revealed that its rebrand comes in part because Congress has been steadily expanding the use of 529 plans beyond traditional college costs to include K-12 private school, apprenticeship programs, and student loan paydown. Backer also reported it has already helped its clients save $20 million for college, with 40% of the money coming from family and friends – a rate of gifting that’s 30x higher than the industry average.
Funds from the latest investment round will be used to continue the growth and development of Backer’s platform.