LOS ANGELES – Northstar, which provides financial wellness benefits for employees, has raised $24.4 million in new funding led by GGV Capital and joined by new investors PayPal Ventures, Thomson Reuters Ventures, and Canvas Ventures. Existing investors M13, Workday Ventures, Parade Ventures, Foundation Capital, Designer Fund, and RRE also participated, bringing Northstar’s total funding to $40 million.
Northstar’s financial wellness program guides employees through various financial and life situations, and helps companies support their teams at scale through onboarding, open enrollment, equity events, and more. The additional capital will allow the company to expand its products and global reach furthering Northstar’s mission to bring financial wellness to 100%. Employees in 18 countries can now work at Northstar, and the company has plans to expand to 30+ countries by the end of 2023.
Establishing and maintaining financial stability has become increasingly difficult in today’s economic environment, accentuated by record high inflation and labor market volatility. Today, 42% of high earners making more than $100,000 a year and 70% of the millennial generation live paycheck-to-paycheck. Financial guidance has become a basic need for Americans, but the traditional model for receiving financial advice typically requires individuals to choose between quality and cost. Northstar eliminates this compromise by redefining financial well-being and delivering it at scale through employers, the primary source of most wealth creation.
“Financial well-being is a universal challenge, and today we face a dizzying array of complex decisions and tradeoffs, from understanding debt repayment strategies to making retirement contributions,” said Will Peng, CEO and Co-Founder of Northstar. “By working with employers, we are able to solve a problem for both employee and employer, because work is the decision point for so many financial and life choices. Northstar brings a variety of advice under one roof: financial, benefits, equity, salary.
Northstar has developed a new set of advisory tools to support individuals in today’s financial environment. Instead of using the typical call center model, Northstar uses full-time, in-house financial advisors (CFP®) and matches each employee 1-on-1 with a personal Northstar Advisor, who continues they work. Northstar supports their financial advisors and employees with technology, through a proprietary suite of personal finance and total compensation tools.
Employers such as Snap, Zoom, 23andMe, Virgin Orbit, and NerdWallet partner with Northstar to communicate the value of their total rewards and help employees take action on their compensation to support their life goals. Employees take advantage of the benefit, as Northstar’s average enrollment rate is 50%, compared to the 15-30% averages cited by competitors and their former employer clients. Northstar is proud to have 100% retention of every employer customer who has offered a benefit to its company.