New York-based FinTech firm Vestwell has secured a Series D funding of $125 million, led by Lightspeed Venture Partners, propelling its mission to enhance workplace savings programs across the nation. The $125 million equity round marks a pivotal moment in the US Series D SaaS funding landscape for 2023.
The round also attracted participation from existing investors Fin Capital, Primary Venture Partners, FinTech Collective, and new investors Blue Owl and HarbourVest. The fresh funds acquired will be pivotal in propelling Vestwell’s expansion plans.
“We’re exhilarated to announce our Series D round – our growth has been exceptional, and we’re honored to be working with an array of such esteemed investors and partners. We’re also excited to have Justin and Logan on our board as we partner to bring savings to a new level. With such great people and teams around us, the future looks very bright for Vestwell,” said Vestwell CEO and founder Aaron Schumm.
The company is gearing up to introduce innovative products like Emergency Savings Accounts (ESAs) and Health Savings Accounts (HSAs) to revolutionize the savings experience for both American consumers and businesses. This shift aims to distance these groups from outdated legacy platforms.
Vestwell’s Core Business and Collaborations
Vestwell’s core business is empowering 80 percent of state auto-IRA savings programs nationwide. The company also collaborates with top-tier financial institutions. This influx of capital is poised to accelerate Vestwell’s rapid expansion, particularly as demand for robust savings solutions reaches an all-time high.
The funding will enable Vestwell to support small and emerging businesses, aligning with regulatory tailwinds like the SECURE 2.0 Act. These businesses are increasingly seeking workplace savings programs that offer alternatives to the high fees and administrative burdens associated with traditional providers.
Vestwell’s strategic focus extends to expanding state-savings program initiatives. Furthermore, the company aims to build upon its track record of catalyzing growth initiatives for leading financial institutions that leverage Vestwell’s white-label product. This ensures their competitiveness and plays a crucial role in bridging the American savings gap.
Lightspeed Venture Partners’ Enthusiasm
Justin Overdorff, Partner at Lightspeed Venture Partners, expressed enthusiasm, stating, “We are deeply impressed by Vestwell for its groundbreaking infrastructure-first approach to solving the systemic savings problem in the US. Their commitment to the thoughtful execution of its plans assures us of its stability and growth potential in the workplace savings and investment space.”
Founded in 2016 by Aaron Schumm, Vestwell has become a key player in the employer and individual savings platform arena. The company enables over 300,000 businesses and well over a million active savers, with nearly $30 billion in assets saved across all 50 states.
With Lightspeed Venture Partners at the helm of this substantial Series D funding round, Vestwell will make significant strides in modernizing and expanding its offerings. The infusion of funds comes at a crucial time, aligning with the increasing demand for innovative savings solutions and regulatory support for small businesses.
Logan Allin, Founder and Managing Partner at Fin Capital, added, “Vestwell stands out as a pivotal player in the US financial sector thanks to its innovative approach to simplifying savings. It addresses a crucial need, showing immense potential in a market ripe for disruption. The unique blend of user-friendly technology with a breadth of robust financial tools gives it a significant edge.”
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