Franklin Resources Inc BEN.N, Allianz Life Ventures and the venture capital arm of Nationwide Mutual Insurance Company also invested in the fundraising, which was led by Goldman Sachs' principal strategic investments group, the companies said.
New York City-based Vestwell plans to use the funding to hire engineers and developers to expand its technology and customer service offering, said Aaron Schumm, chief executive and founder of the startup. The firm expects to add around 30 employees, bringing its workforce to nearly 80.
Founded in 2016, Vestwell works with independent wealth management firms, human resources companies, asset managers and others to provide online platforms where companies can store and manage employees' 401(k) retirement plans.
The marketplace for retirement savings plans is worth more than $28 trillion in the United States, according to the Investment Company Institute.
Schumm said Vestwell targets small- to medium-sized employer-sponsored retirement plans, a segment considered less attractive by big companies like Fidelity because they are costly and inefficient to manage.
"We're the engine helping to power these operationally burdensome tasks," Schumm said by phone.
Vestwell's clients include BNY Mellon, the German insurance and asset management company Allianz SE and Namely, a human resources software company.
In a statement, Goldman Sachs' consumer and investment management division co-heads, Timothy O'Neill and Eric Lane, said they were drawn to Vestwell's "modern and intuitive interface that empowers advisers to more efficiently manage" retirement plans.
(Reporting by Elizabeth Dilts; Editing by Leslie Adler)
By Elizabeth Dilts
