Penelope Raises $2.1 Million to Help Small Businesses Take On 401(k) Plans

By Thomas Price | Tuesday, 22 March 2022 | Startup, Finance, Tech

Penelope is a fintech startup that works to help small and micro business owners adopt 401(k) plans to ease the burden of retirement in the future. The company recently closed its pre-seed funding round following the early adoption of its services by a number of new customers.

How Penelope Works and Early Business Growth

Penelope has created an online service that provides small business owners with multiple different recommended 401(k) options. The employer may select one of the following based on the company’s unique needs and size: Pooled Employer Plan (PEP), a Solo 401(k), or a traditional 401(k). The fintech startup also provides an online dashboard that manages all employee contributions to date and can be edited to include new hires throughout the year.

The biggest benefit for many small business owners is the reduction in administrative burdens and potential issues from managing plans over time. The online service handles the basic setup and state regulations to ensure that the 401(k) plans are compliant and properly managed. 

The company was founded in January of 2022 and is based in New York. The stated goal of Penelope is to provide financial security in retirement for underserved communities such as family-owned businesses, minorities, and solo entrepreneurs. Penelope works on a subscription model that has a base monthly fee along with a cost per employee added. 

The fintech startup is a part of the United States (US) retirement & pension plan market projected to be worth over $745 billion in 2022. The market is projected to grow by 8.4% in 2022 alone. 

Penelope has experienced notable early business growth with a number of small business owners who use the online service already despite being launched just a few months ago. The early growth led to attention from a number of investors who saw significant business potential in the product moving forward.

Penelope Funding Round and Plans for Company Expansion

In its pre-seed funding round, Penelope raised $2.1 million in capital. The funding round was led by Slauson & Co with participation from Amplify LA and Black Jays. Additionally, the business round saw support from a number of executives and investors from Wells Fargo, Citigroup, and US Bank. 

Penelope plans to use the newly raised capital to support the onboarding of new customers through public outreach efforts. Furthermore, the fintech startup plans to create a self-service retirement platform that is also designed for small and micro-businesses. This platform would work as a supplementary service to the current online 401(k) services provided by Penelope. Finally, the startup expects to hire new team members to support the growth of its business operations. 

When commenting on the latest funding round for the startup company, Penelope CEO and founder Jean Smart said, “Our mission is to make the American dream of generational wealth building available to small businesses and startups by creating access to affordable 401(k) models and enabling financial inclusion across all socioeconomic levels. Historically, their inability to provide a channel for long term financial security for employees through a 401(k) plan has made smaller businesses vulnerable to losing talent. With Penelope, this legacy obstacle is no longer a concern.”

About the Author

Thomas Price

Tom Price is a writer focusing on Entertainment and Sports Features. He has a degree from NYU in English with a minor in Creative Writing. He has been previously published for Washington Square News, Dignitas, CBR, and Numbers on the Boards.