401GO Raises $12M Series A Funding Led by Next Frontier Capital

401GO, a provider of 401(k) plans tailored for small enterprises and individuals, announced the conclusion of its Series A funding round worth $12 million. Next Frontier Capital led the investment, with Rally Ventures and existing backers Impression Ventures and Stout Street Capital also contributing to the round.

The recent capital infusion will strengthen 401GO’s current 401(k) and individual retirement account platforms amid expectations of small plan startup growth due to retirement plan state mandates and federal tax incentives and mandates. Additionally, the company plans to enhance its embedded financial wellness platform and has outlined a strategy to introduce new offerings, including health savings accounts and emergency savings accounts within the next 12 to 24 months.

401GO aims to use the funds to more than double its workforce, seeking to grow over 110 employees within the next two years. The expansion will encompass all departments, with a specific emphasis on bolstering personnel in software development and sales roles, the firm noted.

“This new funding underscores the confidence our valued investors have in 401GO’s strategic vision and execution,” Daniel Beck, co-founder and CEO of 401GO, said in a statement. “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.”

Established in 2019, 401GO currently serves over 2,500 enterprises. In November 2023, the company introduced GO-IRA, an IRA solution facilitating seamless rollovers of 401(k) investments within its platform, enhancing retirement savings portability for people who switch employers.

Data from the firm’s platform reveals a 51% participation rate in retirement plans among the youngest quartile of employees, surpassing the industry norm of 22% reported by the US Bureau of Labor Statistics.

“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,” Richard Harjes, co-founder and general partner of Next Frontier Capital, said in a statement. “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 advisers.”

Harjes and Tom Peterson from Rally Ventures will join the 401GO’s board of directors.