SAN FRANCISCO, Aug. 04, 2021 (GLOBE NEWSWIRE) -- Top-rated1 SMB 401(k) provider Human Interest today announced that it has raised a $200M Series D round led by The Rise Fund, TPG's global impact investing platform, and joined by SoftBank Vision Fund 2*. The round comes just six months after the completion of Human Interest’s Series C, bringing the total amount raised over the last 12 months to $305M and valuing the company at $1B. The financing included participation from new investor Crosslink Capital and existing investors NewView Capital, Glynn Capital, U.S. Venture Partners, Wing Venture Capital, Uncork Capital, Slow Capital, Susa Ventures, and others. Human Interest also announced the appointment of Chief Financial Officer Mike Armsby, former CFO at Personal Capital and Yodlee, who brings public company experience as Human Interest prepares for its IPO.
The funding reflects the gravity of the retirement savings crisis and Human Interest’s progress in addressing one of the most critical problems in our country. The Rise Fund determined that Human Interest has the potential to deliver outsized societal impact by helping SMB workers build retirement savings that significantly outpace what they would be able to save without an employer-sponsored plan. By making retirement plans accessible, affordable, and easy to use, Human Interest is creating a path to a secure financial future for people in all lines of work.
While 31.7 million SMBs in America make up the majority of businesses,2 only 14% of companies with fewer than 100 employees offer retirement benefits,3 and 74% of people near retirement do not feel they have enough saved.4 Human Interest is eliminating barriers that have kept SMBs and their employees from adopting retirement plans in addition to offering several advantages over legacy providers:
- Increased participation rate: Eligible employees with Human Interest 401(k)s have 2x the industry average participation rate as a result of a streamlined onboarding experience and built-in investment advising.5
- Eliminated transaction fees: Human Interest was the first 401(k) provider to eliminate transaction fees, doing so for both participants and plan sponsors.
- Reduced costs for employers and employees: By using technology to automate 401(k) plan onboarding and administration, Human Interest offers a complete solution at a fraction of the price charged by legacy providers. The cost of a Human Interest 401(k) plan is 40%+ lower than the industry average.6
“Promoting financial health is a core investment pillar for The Rise Fund. Human Interest delivers one of the most compelling solutions to the persistent problem that roughly half of Americans will not have enough savings when they reach retirement age,” said Maya Chorengel, Co-Managing Partner at The Rise Fund. “Despite recent legislation, primarily at the state level, legacy programs have not, to date, produced the same participant outcomes as Human Interest.7 We are proud to join Human Interest in its mission to empower more Americans to save for retirement.”
The company is seeing strong adoption in verticals that have not had retirement benefits, including construction, retail, manufacturing, restaurants, nonprofits, and hospitality. For example, over the past 3 quarters, Human Interest has seen 4.5x customer growth in the restaurant sector. Since the start of the pandemic, Human Interest has experienced 2x higher enrollment growth among hourly workers than salaried workers, and hourly worker assets have tripled.
“Without Human Interest, millions of employees, especially those below the 70th percentile in income, would never have access to a retirement account from their employer,” said John Flynn, Partner at TPG. “Human Interest is poised to have significant societal benefit, specifically for the employees of their customers. In addition, the company has a very attractive, predictable, and scalable business model due to their early investments in advanced technology and automation.”
“The need for a simple, affordable retirement benefit for employers and employees is clear,” said Jeff Schneble, CEO of Human Interest. “Sales have tripled over the last year. Our priority with this funding is to fulfil customer demand by advancing our product and dramatically scaling our team.”
The company will be making significant investments to expand its already vast network of integrations and partnerships with financial advisors, benefits brokers, and payroll companies. "By headcount, we more than doubled in size over the last 12 months to 350 employees and we’ll add another 200 employees nationwide by the end of 2021, primarily in our product, engineering, and revenue teams,” said Schneble.
Human Interest was recently recognized by Forbes as one of America’s Best Startup Employers, by the San Francisco Business Times as one of the Best Places to Work in the Bay Area, by CB Insights as a Top Fintech 2020, and as a 2021 Top Company by Y Combinator.
About Human Interest
Human Interest is an affordable, full-service 401(k) provider that makes it easy for small and medium-sized businesses to help their employees save for retirement. Founded in 2015 and headquartered in San Francisco, Human Interest helps employees in all lines of work access retirement benefits and a path to financial independence. For more information please visit humaninterest.com or follow us on LinkedIn.
Investment Advisory services are offered by Human Interest Advisors, a subsidiary of Human Interest Inc. Human Interest Advisors is a registered investment advisor with the Securities and Exchange Commission ("SEC"). SEC registration does not imply a certain level of skill or training. Investing involves risk. Past performance is not a guarantee or indicative of future returns. The value of your investment will fluctuate, and investors may earn or lose money. Additional information can be found in the company’s Form ADV Part 2A.
About The Rise Fund
The Rise Fund is the world’s largest global impact platform committed to achieving measurable, positive social and environmental outcomes alongside competitive financial returns. With more than $5.5 billion in assets under management across its platform, The Rise Fund works with growth-stage, high potential, mission-driven companies that have the power to change the world. Headquartered in San Francisco, The Rise Fund was founded in 2016 by TPG in partnership with Bono and Jeff Skoll and offers deep expertise in business solutions to help achieve the United Nations’ Sustainable Development Goals. As part of TPG, The Rise Fund offers investment resources, business-building skills, rigorous measurement, and a global network to help portfolio companies accelerate growth and impact. With the ability to invest across a wide variety of sectors and countries at scale, The Rise Fund focuses on opportunities in climate, education, food and agriculture, financial technology, healthcare, and technology. For more information, visit www.therisefund.com or @therisefund on Instagram.
Media Contact:
Chris Ulbrich
Firebrand Communications
415 848 9175
humaninterest@firebrand.marketing
Ari Cohen
TPG/The Rise Fund
415 743 1550
media@tpg.com
*As of the date of this press release, SoftBank Group Corp. has made capital contributions to allow investments by SoftBank Vision Fund 2 ("SVF 2") in certain portfolio companies. The information included herein is made for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy limited partnership interests in any fund, including SVF 2. SVF 2 has yet to have an external close, and any potential third-party investors shall receive additional information related to any SVF 2 investments prior to closing.
1 According to public review site(s) as of July 15, 2021
2 Small Business Administration, June 2020
3 Why Small Businesses Don’t Offer Retirement Plans
4 Schroders Retirement Survey, 2021
5 Human Interest data; U.S. Census Bureau, 2017
6 Human Interest data (Essentials Plan) and 401(k) Book of Averages, 2021; assuming a 25 or 50 participant plan where the average participant’s balance is $10,000
7 National Bureau of Economic Research, 2021