Human Interest, a 401(k) provider for small and medium-sized businesses (SMBs), announced today a $10 million extension to its Series C round, bringing its total to $50 million.
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In March, we reported that San Francisco-based Human Interest had closed on a $40 million Series C round just months after raising a $15.4 million Series B. The extension brings Human Interest’s total debt and (mostly) equity raised to just over $80 million since its April 2015 inception, according to Crunchbase data.
Glynn Capital led the extension, which was fueled by “strong customer demand,” according to the company.
I hopped on the phone with Jeff Schneble, CEO of Human Interest, who told me that the COVID-19 pandemic has only driven more interest in his startup’s offerings.
Human Interest’s digital retirement benefits platform allows users “to launch a retirement plan in minutes and put it on autopilot,” according to the company. It currently provides retirement savings plans to over 2,200 companies and more than 100,000 employees.
With more people and companies seeking to save money amid the pandemic, Human Interest’s revenue over the past two months is up “three to four times” compared to the same period last year, according to Schneble.
“We’re on track to have the highest sales months in the company’s history in May and June,” he told Crunchbase News. “That’s good no matter what but doubly good given the fact our previous records were usually achieved in the fourth quarter with the second quarter historically being a slower period. ”
Because Human Interest offers retirement benefits at “a much lower cost” than traditional 401(k) and 403(b) providers, many companies and people looking to save money have either switched plans or signed up for new accounts, Schneble said.
In fact, conversions historically made up about 15 percent of the company’s business but these days it’s more like one-third.
“Our product is resonating a lot right now as people try to save money,” Schneble noted.
Also, with the stock market down, “it’s a great time to launch a retirement plan and invest in the market at lower valuations for assets,” he said.
The company plans to use the new capital to double its engineering team by July 2020 in order to deepen the product’s technical lead and to make retirement benefits even more accessible to SMBs.
It currently has about 150 employees, having added 20 people in the last two months. The company has also implemented a “No Layoff Pledge,” saying it won’t lay off anyone this year.
Charlie Friedland, principal at Glynn Capital, said in a statement that his firm believes Human Interest “is taking an innovative approach to solving the lack of appropriate access to retirement savings, a major and growing issue.”
Human Interest has chosen to partner with Glynn Capital and its previous lead investor, Oberndorf Enterprises LLC, because of the firms’ long-term approach to investing.
“We wanted to know that we’d have access to capital as long as we need it and even through an IPO,” Schneble told Crunchbase News. “We like that they have hold periods of 20 to 30 years.”
Illustration: Li-Anne Dias