401GO, a retirement plan provider for employers, advisors, and individuals, this week announced the completion of its $12 million Series A funding round. Next Frontier Capital led the round, which also included Rally Ventures, Impression Ventures, and Stout Street Capital.
The latest capital infusion will fuel the next stage of the company’s growth and advance its mission to enhance retirement savings through its innovative blend of advanced technological solutions with a high-touch, advisor-based model. In addition to bolstering its existing 401(k) and IRA platforms, 401GO will enhance its embedded financial wellness platform and set up a roadmap to launch new products, such as health savings accounts and emergency savings accounts, over the next 12-24 months.
401GO said it plans to more than double its headcount to more than 110 people over the next two years, adding positions in all areas of the business, but with a particular focus on software development and sales.
Today, the company serves more than 2,500 businesses, totalling more than 30,000 active users. In November 2023, 401GO launched GO-IRA, an IRA offering that allows for a rollover of 401(k) investments within the 401GO platform, improving the portability of retirement savings for employees who switch employers.
The company’s platform shows a 51% retirement plan participation rate amongst the youngest quartile of employees, which is more than double the industry average from the US Bureau of Labor Statistics (22%).
“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,” 401GO co-founder and CEO Daniel Beck said. “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.”
“We have followed 401GO for a couple of years, 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,” Richard Harjes, co-founder and general partner of Next Frontier Capital said. “401GO has architected an innovative technical solution with great customer support and quick onboarding, while retaining 401(k) 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 401(k) 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.”
Harjes and Tom Peterson from Rally Ventures will join the 401GO board of directors.
