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NextCapital, a 401(k) managed accounts software company, has just raised a $6 million Series A funding round from several of its biggest customers. Russell Investments and Transamerica Ventures Fund led the round, and additional investors were FinTech Collective, Kelvingrove Ventures and the Vermont Seed Capital Fund. Russell and Transamerica use a co-branded version of NextCapital’s software to advise their clients on retirement savings.
“We’re a digital adviser that works with large partners to deliver world-class advice and investment management — at the lowest cost on the market,” said NextCapital CEO John Patterson in a statement. “This global market requires a different approach — combining a new kind of platform for investors with a select group of long-standing players.”
NextCapital‘s software helps advise investors on meeting certain financial goals for retirement. The software helps track and project investment earnings via dashboards and reports. It also plugs into investment news via the Wall Street Journal and StockTwits, a platform that scrapes financial news chatter from Twitter.
In recent years, everyday investors have become increasingly interested in taking control of their retirement investments due to the poor performance of manage investment services. As a sort of middle ground, NextCapital software gives clients the control they want, while giving managed services the opportunity to continue selling their advice.
“We have been working with NextCapital for more than a year to deliver our clients a more personalized asset allocation for their defined contribution participants – a solution we call Russell Adaptive Retirement Accounts,” said Josh Cohen, managing director and head of Russell’s institutional defined contribution business. “As we look ahead, we anticipate demand for these types of enhanced default investment solutions to grow.”
“Increasingly, asset management firms such as Transamerica want to be in a strong position to manage the assets of customers who have accumulated retirement savings through products offered by their other lines of business,” said said Georg Schwegler, CEO of Transamerica Ventures Fund. “NextCapital’s investor dashboard – coupled with its in-plan managed accounts – will enhance Transamerica’s ability to roll customers’ 401(k) plan assets into a reliable income stream throughout an increasingly longer retirement.”
