Vestwell Company Profile

Background

Overview

Vestwell, founded in 2016 and headquartered in New York City, is a fintech company specializing in modernizing workplace savings and investment programs. The company offers a cloud-based digital recordkeeping platform that supports various savings programs, including 401(k), 403(b), IRA, 529 College Savings, ABLE disability savings, and Emergency Savings programs.

Mission and Vision

Vestwell aims to close the American savings gap by providing accessible and efficient savings tools for employers and individual savers. The company's mission is to transform access to essential financial wellness and savings programs, enabling savers at every level to build and prepare for their future.

Industry Significance

By rearchitecting the workplace retirement offering from the ground up, Vestwell has built an engine to power the $30 trillion industry. Its customizable, open architecture, and white-labeled platform becomes a natural extension of financial services and payroll partners, removing traditional friction points plaguing legacy recordkeeping.

Key Strategic Focus

Core Objectives

Vestwell focuses on expanding access to critical savings programs through leading technology and premier partnerships. The company aims to support savers at every level, whether for retirement, education, emergencies, or health-related expenses.

Areas of Specialization

The company specializes in providing a suite of programs, including retirement, health, and education savings plans. Vestwell's platform supports various savings programs, such as 401(k), 403(b), IRA, 529 Education, ABLE disability, and Emergency Savings programs.

Key Technologies Utilized

Vestwell's cloud-based digital recordkeeping platform offers white-label capabilities, omnichannel service, and enhanced employer engagement tools. The platform processes payroll deductions, handles recordkeeping, and manages ongoing administration and compliance requirements for workplace savings plans.

Primary Markets Targeted

Vestwell serves over 350,000 businesses and well over a million active savers, with over $30 billion in assets saved across all 50 states. The company partners with financial institutions, advisory firms, and state governments to expand its reach and impact.

Financials and Funding

Funding History

Vestwell has raised a total of $289 million in funding. Notable funding rounds include:

Series A (October 2017): $8 million led by F-Prime Capital.

Series B (April 2019): $30 million led by Goldman Sachs, Point72 Ventures, and F-Prime Capital.

Series C (July 2021): $70 million co-led by Wells Fargo Strategic Capital and Fin Venture Capital, with participation from Goldman Sachs, Morgan Stanley, Manulife, Point72, and Nationwide Ventures.

Series D (December 2023): $125 million, bringing the company's valuation to $1 billion.

Intended Utilization of Capital

The capital raised has been utilized to expand Vestwell's product offerings, enhance technological capabilities, and support strategic acquisitions, such as the acquisition of Gradifi Solutions from Morgan Stanley in July 2023.

Pipeline Development

Key Pipeline Candidates

Vestwell plans to launch the TIAA Secure Income Account (SIA) in 2025, a guaranteed lifetime income solution available through target-date structures for 401(k) and 403(b) plans on its platform. The SIA will offer guaranteed interest for retirement savings and provide pension-like retirement income to help cover everyday living costs for retirees.

Stages of Product Development

The company continues to develop and enhance its platform to support various savings programs, including retirement, health, and education savings plans. Vestwell's platform features white-label capabilities, omnichannel service, and enhanced employer engagement tools.

Target Conditions and Timelines

Vestwell aims to address the American savings gap by providing accessible and efficient savings tools for employers and individual savers. The company plans to launch the TIAA Secure Income Account in 2025 to offer guaranteed lifetime income solutions for retirees.

Technological Platform and Innovation

Proprietary Technologies

Vestwell's cloud-native platform enables employers to offer workplace savings programs, supporting various savings programs, including 401(k), 403(b), IRA, 529 College Savings, ABLE disability savings, and Emergency Savings programs.

Significant Scientific Methods

The platform processes payroll deductions, handles recordkeeping, and manages ongoing administration and compliance requirements for workplace savings plans. Vestwell's platform features white-label capabilities, omnichannel service, and enhanced employer engagement tools.

Leadership Team

Aaron Schumm – Founder and CEO

Aaron Schumm founded Vestwell in 2016, bringing extensive experience in fintech and investment management. Under his leadership, Vestwell has grown to serve over 350,000 businesses and well over a million active savers, with over $30 billion in assets saved across all 50 states.

Rob Molchon – Chief Technology Officer

Rob Molchon joined Vestwell as CTO in October 2021, bringing a strong background in technology leadership. He oversees the company's technological strategy and development.

Ryan Anderson – Chief Product Officer

Ryan Anderson was promoted to Chief Product Officer in October 2021. He leads the product development team, focusing on enhancing Vestwell's platform and expanding its offerings.

Leadership Changes

In October 2021, Vestwell appointed Rob Molchon as Chief Technology Officer and promoted Ryan Anderson to Chief Product Officer. These leadership changes aim to strengthen the company's technological and product development capabilities.

Competitor Profile

Market Insights and Dynamics

The digital retirement market has seen significant growth, with over 200 companies entering the field as of 2023. The global digital retirement planning market is expected to reach approximately $20 billion by 2025, growing at a CAGR of 10% from 2020 to 2025.

Competitor Analysis

Key competitors in the digital retirement space include:

Fidelity Investments: Established in 1946, holding a 17% market share with 39 million customers.

Charles Schwab: Founded in 1971, with a 12% market share and 34 million customers.

Vanguard: Established in 1975, holding a 15% market share with 30 million customers.

T. Rowe Price: Founded in 1937, with an 8% market share and 16 million customers.

Betterment: A fintech company founded in 2010, holding a 5% market share with 1.5 million customers.

Strategic Collaborations and Partnerships

Vestwell has established significant partnerships with major financial institutions, including:

J.P. Morgan Asset Management: In May 2023, Vestwell partnered with J.P. Morgan to power their Everyday 401(k) workplace savings platform for small businesses.

Morgan Stanley: In July 2023, Vestwell acquired Gradifi Solutions, a provider of student loan benefits programs, from Morgan Stanley.

BNY Mellon: Vestwell collaborates with BNY Mellon to enhance its platform offerings.

Allianz SE: The company partners with Allianz SE to expand its reach and impact.

In the public sector, Vestwell powers over 80% of live state auto-IRA programs in the US and serves as administrator to more than 30 state savings programs, including education savings accounts and ABLE programs.

Operational Insights

Strategic Considerations

Vestwell's strategic focus on partnerships with major financial institutions and state governments strengthens its market position and innovation capacity. The company's cloud-based platform offers a cost-effective and user-friendly solution for workplace savings programs, differentiating it from traditional recordkeeping services.

Market Position

Vestwell's partnerships with financial institutions, advisory firms, and state governments have expanded its reach and impact, positioning the company as a leading provider of workplace savings programs.

Distinct Competitive Advantages

Vestwell's customizable, open architecture, and white-labeled platform becomes a natural extension of financial services and payroll partners, removing traditional friction points plaguing legacy recordkeeping. The result is an easier, more efficient, and all-around better experience for everyone, delivered at a fraction of the cost.

Strategic Opportunities and Future Directions

Strategic Roadmap

Vestwell plans to launch the TIAA Secure Income Account in 2025, offering guaranteed lifetime income solutions for retirees. The company continues to enhance its platform to support various savings programs and expand its partnerships with financial institutions and state governments.

Opportunities for Expansion

The growing digital retirement market presents opportunities for Vestwell to expand its offerings and reach. The company's focus on partnerships and technological innovation positions it well to capitalize on these opportunities.

Positioning for Future Objectives

Vestwell's strong leadership team, strategic partnerships, and innovative platform position the company to achieve its future objectives of closing the American savings gap and providing accessible and efficient savings tools for employers and individual savers.