Northstar, a fintech company that enables employers to offer financial wellness as an employee benefit, announced $10.7 million in financing, including a new $7.3 million Series A led by M13 with participation from Foundation Capital and Workday Ventures. The investment comes on the heels of breakout growth and adoption from leading employers including Zoom, ServiceTitan, and Thumbtack.
Northstar makes financial guidance accessible to all individuals by reimagining it as an employer-provided benefit. The innovative platform supports employees in achieving financial wellness across three pillars of service:
- Paired 1-on-1 financial advice from a dedicated Northstar CERTIFIED FINANCIAL PLANNER™ (CFP®), who designs a custom financial plan and proactively optimizes money for each employee.
- Automation to take action on advice, to help employees save, pay off debt, invest, and understand taxes.
- Centralized recommendations on how to best leverage compensation and benefits – such as equity, health plans, HSA/FSA, perks – through personalized advice, open enrollment tools, total rewards statements, and visual offer letters.
The current environment in the United States highlights systemic financial instability and the need for a financial wellness solution that supports all individuals, regardless of their background. Today, three out of four employees cite personal finances as their number one stress, and half of mental health issues and anxiety are caused by financial stress (CapitalOne). The COVID-19 pandemic has only exacerbated these issues, as half of U.S. household income has decreased since March (TransUnion).
By personalizing financial guidance, Northstar has helped employees achieve their distinct financial goals, like saving to buy a house, planning to start a family, paying off debt, saving for retirement, and more. On average, more than 50% of eligible employees have worked with their Northstar CFP®, and messages between employees and their CFPs® have doubled every month since March. Northstar CFPs® also save HR teams valuable time previously spent answering questions about compensation and benefits.
“The Northstar financial wellness benefit is a perfect fit with Zoom’s employee focus,” said Sheila Krueger, Head of Global Benefits at Zoom. “Our employees are taking up the offer for assistance from Northstar’s CFPs® at a rapid pace. Northstar is a piece of the wellness puzzle that was missing, and we’re so happy to provide it to our employees.”
Founded by Will Peng and Matt Matteson, Northstar was inspired by their personal experiences struggling with the systemic problems individuals face with personal finances. Peng, an immigrant, graduated with $35K of student debt, and paid thousands in unnecessary interest because he didn’t know anyone to ask for advice. As General Partner of Red Swan Ventures – which has investments in Guideline, Even, Oscar, and Coinbase – Peng had a front seat to innovative ways that new fintech can solve these financial issues.
“We love partnering with employers – it’s a natural fit,” said Northstar CEO and co-founder Will Peng. “For generations, employees have gotten paychecks and retirement plans through work, but without guidance to manage their finances and achieve their goals. Employment is the primary source of financial stability and wealth creation, and Northstar is redefining the employee experience.”
Leading Northstar’s Series A is M13, which has investments in companies including Ring, Lyft and Snap. M13 brings to Northstar both the holistic support of its Propulsion platform and specialized HR tech expertise in Matt Hoffman, M13’s Partner and Head of Talent and DigitalOcean’s former VP People. Hoffman has joined the Northstar board.
“Northstar has helped redefine a new category of employee benefits, and it’s absolutely one that meets the moment for the world we are in,” Hoffman said. “As an investor, M13 sees the limitless potential for Northstar to transform financial planning into a delightful experience that touches everyone at the most impactful point of their financial journey – where they earn their salary. As a former HR leader, I am inspired by Northstar’s beautifully intuitive product and vision to help employees better understand the drivers of their total compensation and apply them effectively to plan for their financial future and health.”
Additional investors include Parade Ventures, Ludlow Ventures, Designer Fund, Combine, RRE Ventures, Swell Partners, PeopleTech Partners, and founders and C-level executives from NerdWallet, Plaid, Adobe, Amazon, BrandSafway, SunRun, Yelp, Product Hunt, and Thumbtack.