Vestwell, a provider of workplace savings program infrastructure, recently secured $125 million in a funding round termed “preempted.” Led by Lightspeed Venture Partners, the funding round included both returning investors, like Fin Capital and Primary Venture Partners, and newcomers Blue Owl and HarbourVest. While the New York-based fintech company chose not to disclose its valuation, it’s notable that Justin Overdorff from Lightspeed has joined Vestwell’s board as part of the investment.
Founded in 2016 by CEO Aaron Schumm, Vestwell launched its cloud-native platform in 2017 and has since accumulated $227.5 million in total funding. Schumm, without specifying exact revenue, revealed substantial growth to TechCrunch, highlighting a 1000% revenue increase over three years and plans to double annual recurring revenue and volume in 2023.
Vestwell, serving over a million users across 300,000 businesses, facilitates savings programs through partnerships with financial institutions, state governments, and payroll companies, profiting from monthly fees. The company offers a broad range of savings solutions, including retirement and health programs, and has notably become a dominant force in state auto-IRA savings programs, powering the majority in the US.
The recent funding will fuel further expansion of state savings initiatives, product enhancements, and potential acquisitions, as evidenced by their recent acquisition of Gradifi from Morgan Stanley. With a team that has grown significantly over the past year, Vestwell continues to build its market position, backed by its investors’ confidence and recognition as a leading innovator in the savings sector.