401GO Raises $12 Million Series A
April 23, 2024, Sandy, UT
Today 401GO announced it has raised a $12 million Series A funding round, led by Next Frontier Capital of Bozeman. Additional investors include Rally Ventures (Menlo Park and Minneapolis), who joined existing investors Impression Ventures (Toronto), and Stout Street Capital (Denver) that participated in the new investment.
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 be enhancing and adding capabilities to its embedded financial wellness platform, as well as setting a roadmap to launch new products, such as Health Savings Accounts (HSAs) and Emergency Savings Accounts (ESAs), over the next 12-24 months.
401GO also plans to more than double its headcount to employ more than 110 people over the course of the next two years, adding positions in all areas of the business, but with a particular focus on software development and sales.
Founded in 2019, 401GO has seen steady growth since its inception, averaging 250% year-over-year revenue growth over the last three years. Today the company serves more than 2,500 businesses, totaling more than 30,000 active users. In November 2023, 401GO launched GO-IRA, an IRA offering that allows for a hassle-free rollover of 401(k) investments within the 401GO platform, improving portability of retirement savings for employees who switch employers.
In August 2021, the company raised a $2 million seed round led by Toronto-based Impression Ventures, which also took a board seat with the company. Signal Peak Ventures of Salt Lake City, and Stout Street capital of Denver also joined the round. In March 2020, 401GO raised $1 million.
The company’s focus on helping employees who are early in their career put away their first dollars towards retirement is validated by data from its platform showing 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%). The company's outreach strategy also addresses the "forgotten" 401(k) plans—the 24 million+ 401(k) accounts belonging to American workers who have either lost track of them or cashed them out when they changed jobs.
Daniel Beck, Co-Founder and CEO of 401GO said: “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. 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.”
Richard Harjes, Co-Founder and General Partner of Next Frontier Capital agrees: "We have followed 401GO for a couple years now, 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. 401GO has architected an innovative technical solution with great customer support and quick on-boarding, while retaining 401k 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 401k 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.”
Richard Harjes from Next Frontier Capital and Tom Peterson from Rally Ventures will be joining the 401GO Board of Directors.
