Jeff Schneble is the CEO of the 401 (k) startup Human Interest.
Courtesy of Human Interest
Jeff Schneble knows that most people don’t hear the term 401 (k) and get excited – but he does. For the CEO of Human Interest, it’s about the opportunity to give more people access to a retirement and investment plan. His startup creates retirement plans for small and medium-sized businesses left behind by oversized and complicated traditional plans, leaving their employees without the tax break that comes with investing straight from their paycheck. “We’re really talking about the last 20 to 30 years in a person’s life,” Schneble told Forbes. “The two outcomes are, if you save appropriately, you can spend the last 20 to 30 years of your life doing things you always wanted to do, if you don’t save enough you are in a really difficult position. ”
Many of the small businesses that don’t offer a 401 (k) plan aren’t because they don’t want to, Schneble says. That’s because the process is too tedious and tedious. This is exactly the experience of the founder of Human Interest, Roger Lee. Years earlier, Lee’s previous company, adtech startup Thunder, was growing rapidly. He checked to see if he was adding the benefit before realizing how difficult the process was. Knowing that he couldn’t be the only one with this problem, he started Human Interest to develop a better model. Schneble participated in the company’s Series A round in 2018 and invested as a partner of Wing VC. “After looking at thousands of companies, I had never seen anything like it,” says Schneble. “Once you’ve seen it, you can’t see it again.” He joined as CEO in 2019 and the company continues to see a strong pull. The startup is now announcing its second round of funding in six months after exceeding its own growth targets.
The San Francisco-based startup raised a $ 200 million Series D round, valued at $ 1 billion, six months after its $ 105 million Series C in January. This round was led by the Rise Fund and TPG’s SoftBank and included NewView Capital, Wing VC, Crosslink Capital and Slow Ventures, among others. Schneble says the startup didn’t originally plan to raise another round of funding anytime soon, but it had already exceeded the revenue it wanted to raise more capital. In addition, TPG’s Rise Fund had looked at investing earlier in the year, as promoting financial health is one of the pillars of the mission-oriented fund. John Flynn, a partner at TPG, tells Forbes that they have been waiting for an opportunity to invest in the largely untapped 401 (k) market. “The need here is clearly huge,” says Flynn. “The historical problem was that the systems for 401 (k) s are complicated, highly regulated and there isn’t much innovation.”
Human Interest tries to differentiate its approach by removing potential obstacles from the process. The company sells 401 (k) programs as a package to employers at a flat rate, eliminating the need for companies to go through a potentially lengthy and expensive process with a broker. The startup is also connected to payroll providers and also handles the onboarding. For the employees of each customer, they simply decide on or off. “It’s so much easier than the other products on the market,” says Schneble. “Even if it’s better than the other things out there, it could still be a lot better. What we really strive for is a smooth utility where every company only has this and it runs in the background. “
Human Interest was originally aimed at small businesses that didn’t have a 401 (k) offering, but it is attracting larger organizations and companies with existing plans to switch to its platform. The startup didn’t release any specific metrics, but Schneble says its sales are in the “tens of millions” and expects to exceed $ 100 million in sales within 24 months. Human Interest currently has more than 100,000 users and plans to go public in the next few years once sales reach more than $ 200 million. “The ultimate goal is to really see if we can make a significant dent in the pension crisis,” says Schneble. “We have around 100,000 users, so we still have a long way to go. It’s a journey of several decades. “