Human Interest Raises $200M at $1B Valuation, Eyes IPO

Human Interest Achieves Unicorn Status with $200 Million Funding Round

Just under six months following a $55 million Series C funding raise, Human Interest, a provider of 401(k) solutions for small and medium-sized businesses (SMBs), has announced a new $200 million funding round. This latest investment elevates the company to unicorn status.

Investment Details

The Rise Fund, the impact investing platform of TPG, spearheaded the funding round. SoftBank Vision Fund 2 also participated significantly. Additional investors included Crosslink Capital, a new contributor, alongside existing backers such as NewView Capital, Glynn Capital, U.S. Venture Partners, Wing Venture Capital, Uncork Capital, Slow Capital, and Susa Ventures.

Over the last year, the San Francisco-based firm has secured a total of $305 million in funding. Including this recent round, Human Interest has accumulated $336.7 million in total investment since its founding in 2015.

Plans for an IPO

The company is demonstrably preparing for an Initial Public Offering (IPO). This is highlighted by the appointment of Mike Armsby, formerly CFO of Yodlee, as its new CFO. The target timeframe for a traditional IPO is currently set for sometime in 2023.

Executives have stated the goal is to achieve “$200 million+ in run-rate revenue” prior to going public. Currently, the company reports “tens of millions of run-rate revenue” and is experiencing substantial monthly revenue growth.

Human Interest’s Platform

Human Interest offers a digital retirement benefits platform designed to simplify the process of establishing and managing a retirement plan. The company claims users can “launch a retirement plan in minutes and put it on autopilot.” A key differentiator is the elimination of all 401(k) transaction fees.

Growing Demand and Expansion

Demand for 401(k) plans among SMBs is reportedly at a record high. Human Interest has experienced a tripling of sales over the past year. The company has also expanded its workforce, more than doubling its headcount to 350 employees in the last 12 months.

The startup is witnessing significant adoption within industries traditionally lacking retirement benefits, including construction, retail, manufacturing, restaurants, nonprofits, and hospitality. Notably, customer growth in the restaurant sector has increased by a factor of 4.5 over the past three quarters.

Since the onset of the pandemic, Human Interest has observed twice the enrollment growth among hourly workers compared to salaried employees, with assets held by hourly workers tripling.

Impact Investing Perspective

Maya Chorengel, co-managing partner at The Rise Fund, stated, “Promoting financial health is a core investment pillar. Human Interest delivers a compelling solution to the widespread issue of insufficient retirement savings among approximately half of Americans.”

She further noted that, despite recent legislative efforts, particularly at the state level, existing programs have not consistently yielded the same positive participant outcomes as Human Interest.

Future Investments

The newly acquired capital will be allocated to expanding the company’s network of integrations and partnerships with financial advisors, benefits brokers, and payroll companies. Furthermore, Human Interest anticipates adding another 200 employees by the end of the year, primarily within its product, engineering, and revenue teams.

Competitive Landscape

The market for 401(k) solutions for SMBs is becoming increasingly competitive. In June, Guideline, a competitor, also secured $200 million in funding, led by General Atlantic.

Additional details regarding the IPO and revenue figures were incorporated following the initial publication of this report.