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If you’ve ever left a job, chances are you left your 401(k) plan along with it.
And, if you’re like many Americans and change jobs every few years or so, you could have multiple 401(k) plans spread out at various companies, doing their own thing.
Many of us don’t deal with the hassle of trying to consolidate accounts, which can lead to lost money over many years.
Enter Capitalize. The New York-based startup aims to address this very problem with a platform that it claims makes it virtually painless to locate misplaced 401(k) accounts, select and open individual retirement accounts (IRAs) and consolidate retirement plans — for free.
And it’s just raised $12.5 million in a Series A round to help grow that platform. Canapi Ventures led the round, with participation from existing backers including Bling Capital, Greycroft, RRE Ventures and Walkabout Ventures.
Australian-born Gaurav Sharma co-founded the company after years of working in traditional finance.
“While I enjoyed investing, I started peeling back the layers and saw a host of systemwide problems with the 401(k) market,” he recalls. “One of those being that our accounts are tied to our employers.”
Sharma said that about one-third of the people who change jobs end up cashing out their 401(k) plans, and paying the related penalties.
“Another several million leave it behind for an extended period of time, ultimately because it’s complicated to move the money,” he said.
Sharma teamed up with CTO Chris Phillips in late 2019 to form Capitalize, which went on to raise a $2 million seed round last March led by Bling Capital. Since its formal launch last September, the rollover platform has processed almost $10 million in volume.
“There were a lot of layoffs during the summer last year as a result of the pandemic,” Sharma said. “So a lot of our early users while we were in beta were people who had been impacted by those layoffs.”
I was curious about how Capitalize’s offering differs from the services that financial advisors provide. According to Sharma, the difference lies in the process and eligibility requirements.
“If you have an advisor, they will help you do some of this but in a really manual way, whereas we have built an online platform to help consumers find and consolidate retirement accounts,” Sharma told TechCrunch. “And usually, you have to have a few hundred thousand in assets to even get an advisor.”
That was one of the things that motivated Sharma.
“Whether you have $500 or $500,000 in assets, we’ll help you,” he said.
As mentioned above, Capitalize’s service is free to consumers, who can go to the site and let the company manage the consolidation process for them. If they need to open an IRA, the platform can help them do that, too.
“We help them compare IRAs from leading fintech providers and established institutions,” Sharma explained. If Capitalize has forged a commercial relationship with one of those providers, it is compensated by them for the referral in a model that is similar to NerdWallet, PolicyGenius and Credit Karma.
And if they already have an IRA, Capitalize will still help with consolidation.
Capitalize also offers employers a free onboarding service to help departing employees “roll over quickly at the point of job change,” Sharma said.
“This is also great for the employer, who can save money on administrative fees and reduce fiduciary risk,” he added.
Canapi Venture partner Jeffrey Reitman said his fintech venture fund, which has about 43 banks as LPs, was attracted to a number of things about Capitalize’s team and platform.
First off, he described Sharma as “one of the best early-stage CEOs” he’s seen when it comes to recruiting, company building and decision making.
Canapi also had one of its VPs and family members try out the product in its early beta format.
They said, according to Reitman, that the platform “worked like magic and removed so much friction in the process.”
“So when you have a team member that has such a strong reaction to it, that’s such a validator of what it can be at scale,” he told TechCrunch. “That made it a bit of a no-brainer for us.”
Besides also being drawn to the company’s “mission-driven” approach, Reitman noted that about 80% of its existing bank LP base has existing IRA and individual retirement account products.
“Many of them are digital in nature, we believe there should be a lot of synergies between what banks are trying to accomplish as they further digitize their product suite and what Capitalize is looking to accomplish in reducing friction for as many people as possible in that process.”
Looking ahead, Capitalize plans to use its new capital to refine and streamline its product, and continue to invest in technology.
With a stated goal of aligning the mortgage industry with consumer interests, Austin-based UpEquity has raised $25 million in equity and debt funding to expand its business.
Chief executive Tim Herman started the mortgage lending company to take advantage of what he saw as inefficiencies in the $2 trillion U.S. housing market.
Existing financial services and property technology companies treat the symptom and not the cause of market inefficiencies, said Herman.
The company makes free cash offers but charges 2.5% on the loans it makes to homebuyers to give them the cash they need to make an offer before having to go through the traditional process of taking out a home loan through a bank. Then the homeowners can make payments directly to UpEquity to pay off the mortgage on the house.
“Our cash offer works like a guarantee that during the escrow period we will be able to get the mortgage in place,” Herman said.
A U.S. Naval Academy graduate and former fighter pilot, Herman saw real estate as the only avenue to true wealth creation open to him and his family given their years on the road and lack of available investment capital.
After the Navy, Herman went to Harvard Business School and met his co-founder Louis Wilson. It was in Boston while in B-School that the two men started UpEquity.
They since relocated to Austin because of its booming housing market and relatively more relaxed regulatory environment.
Ultimately, the pitch to customers is the ability to make an all-cash offer, which dramatically improves the likelihood of closing on a house. It’s a luxury that roughly 90 percent of Americans can’t afford, Herman said. There’s no downside for selling homeowners, if a purchaser doesn’t end up buying the home then UpEquity owns the house.
Of all of the 300 deals the company has done so far, only two have failed.
That’s why a company like UpEquity can raise $7.5 million in venture and $17.5 million in venture debt to start making loans.
The company’s A round was led by Next Coast Ventures and UpEquity said it would use the money to fund product development that can slash the time-to-close for the real estate agents that act as the company’s sales channel to ten days.
“Our goal is to finally align the mortgage industry with consumer interests,” said UpEquity Co-Founder and CEO Tim Herman. “This funding is validation that consumers, real estate agents and venture investors understand the power of removing friction from the homebuying process, not only for personal advancement, but to attain the American Dream.”
So far the company has expanded its operations from Texas into Colorado, Florida and California, where it has originated $100 million in mortgages in 2020.
“As real estate continues to evolve in the face of limited supply and tight competition, UpEquity is at the helm of PropTech’s growing capabilities,” said Thomas Ball, managing director at Next Coast Ventures. “Most innovation has focused on the front end, but until now, nobody has expedited what happens after the borrower submits an application. UpEquity has the team, talent and technology to not only succeed, but to disrupt and emerge as the leader in the mortgage lending marketplace.”
Royal Dutch Shell Group, one of the largest publicly traded oil producers in the world, just laid out its plan for how the company will survive in a zero-emission, climate conscious world.
It’s a plan that rests on five main pillars that include the massive rollout of electric vehicle charging stations; a greater emphasis on lubricants, chemicals, and biofuels; the development of a significantly larger renewable energy generation portfolio and carbon offset plan; and the continued development of hydrogen and natural gas assets while slashing oil production by 1% to 2% per year and investing heavily in carbon capture and storage.
These four large categories cut across the company’s business operations and represent one of the most comprehensive (if high level) plans from a major oil company on how to keep their industry from becoming the next victim of the transition to low emission (and eventually) zero emission energy and power sources (I’m looking at you, coal industry).
“Our accelerated strategy will drive down carbon emissions and will deliver value for our shareholders, our customers and wider society,” said Royal Dutch Shell Chief Executive Officer, Ben van Beurden, in a statement.
To keep those shareholders from abandoning ship, the company also committed to slashing costs and boosting its dividend per share by around 4% per year. That means giving money back to investors that might have been spent on expensive oil and gas exploration operations. The company also committed too pay down its debt and make its payouts to shareholders 20% to 30% of its cash flow from operations. That’s… very generous.
Image Credits: Bryce Durbin
The Plan
Shell is a massive business with more than 1 million commercial and industrial customers and about 30 million customers coming to its 46,000 retail service stations daily, according to the company’s own estimates. The company organized its thinking around what it sees as growth opportunities, energy transition opportunities, and then the gradual obsolescence of its upstream drilling and petroleum production operations.
In what it sees as areas for growth, Shell intends to invest around $5 billion to $6 billion to its initiatives including the development of 500,000 electric vehicle charging locations by 2025 (up from 60,000 today) and an attendant boost in retail and service locations to facilitate charging.
The company also said it would be investing heavily in the expansion of biofuels and renewable energy generation and carbon offsets. The company wants to generate 560 terawatt hours a year by 2030, which is double the amount of electricity it generates today. Expect to see Shell operate as an independent power producer that will provide renewable energy generation as a service to an expected 15 million retail and commercial customers.
Finally the company sees the hydrogen economy as another area where it can grow.
In places where Shell already has assets that can be transitioned to the low carbon economy, the company’s going to be doubling down on its bets. That means zero emission natural gas production and a trebling down on chemicals manufacturing (watch out Dow and BASF). That means more recycling as well, as the company intends to process 1 million tons of plastic waste to produce circular chemicals.
Upstream, which was the heart of the oil and gas business for years, the company said it would “focus on value over volume” in a statement. What that means in practice is looking for easier, low cost wells to drill (something that points to the continued importance of the Middle East in the oil economy for the foreseeable future). The company expects to reduce its oil production by around 1% to 2% per year. And the company’s going to be investing in carbon capture and storage to the tune of 25 million tons per year through projects like the Quest CCS development in Canada, Norway’s Northern Lights project, and the Porthos project n the Netherlands.
“We must give our customers the products and services they want and need – products that have the lowest environmental impact,” van Beurden said in a statement.”At the same time, we will use our established strengths to build on our competitive portfolio as we make the transition to be a net-zero emissions business in step with society.”
Money or finance green pattern with dollar banknotes. Banking, cashback, payment, e-commerce. Vector background.
Money talk
For the company to survive in a world where revenues from its main business are cut, it’s also going to be keeping operating expenses down and will be looking to sell off big chunks of the business that no longer make sense.
That means expenses of no more than $35 billion per year and sales of around $4 billion per year to keep those dividends and cash to investors flowing.
“Over time the balance of capital spending will shift towards the businesses in the Growth pillar, attracting around half of the additional capital spend,” the company said. “Cash flow will follow the same trend and in the long term will become less exposed to oil and gas prices, with a stronger link to broader economic growth.”
Shell set targets for reducing its carbon intensity as part of the pay that’s going to all of the company’s staff and those targets are… eye opening. It’s looking at reductions in carbon intensity of 6-8% by 2023, 20% by 2030, 45% by 2035 and 100% by 2050, using a baseline of 2016 as its benchmark.
The company said that its own carbon emissions peaked in 2018 at 1.7 giga-tons per year and its oil production peaked in 2019.
The context
Shell’s not taking these steps because it wants to, necessarily. The writing is on the wall that unless something dramatic is done to stop fossil fuel pollution and climate change, the world faces serious consequences.
A study released earlier this week indicated that air pollution from fossil fuels killed 18% of the world’s population. That means burning fossil fuels is almost as deadly as cancer, according to the study from researchers led by Harvard University.
Beyond the human toll directly tied to fossil fuels, there’s the huge cost of climate change, which the U.S. estimated could cost $500 billion per year by 2090 unless steps are taken to reverse course.
Shauntel Garvey and Jennifer Carolan liked edtech before the sector was cool, so the duo co-founded Reach Capital in 2015 with a $53 million debut fund. The San Francisco-based venture firm has since put checks into education startups including Newsela, Sketchy, ClassDojo and Outschool, landing six exits so far.
Now, after seeing its portfolio accelerate in the wake of the coronavirus, Reach is announcing its third fund aimed at backing edtech startups. Reach Capital III is a $165 million fund, the firm’s biggest to date. Reach’s team, which also includes Chian Gong, Wayee Chu and Esteban Sosnik, started raising the investment vehicle over the summer. New LPs in the fund include Sesame Workshop, National Geographic, Kaiser Foundation Hospitals and Goldman Sachs.
The Reach Capital team. Image Credits: Reach Capital
Reach plans to reserve half of its fund for follow-on investments for its startups, and the other half will go toward net-new investments. The firm intends to back 20 startups through Reach III, targeting about 15% ownership in each deal.
The edtech market raked in more than $10 billion in venture capital investment globally in 2020, but for students, parents and teachers, the past 12 months were defined more by its scramble than its surge. Reach as well as other firms have the opportunity to back startups that could change the broken bits, which is no easy feat.
Carolan, who taught in Chicago public schools for seven years before joining venture, said that the entire education system’s restructure has opened the door for more innovation and opportunities.
“What parents were experiencing with remote learning was the result of underinvestment in edtech for a long time,” she said. “The companies that were adopted to meet the ends were fragmented, many of the products were inoperable and many of them were built for the home school market and repurposed for schools.” Now, Carolan sees opportunity in the fact that more students have digital devices due to 1:1 technology infrastructure in schools.
“There has never been a more exciting time to be investing in education,” she said. Reach plans to back companies across edtech subsectors, from early childhood to K-12 to post-secondary learning. The firm is also joining a number of investors betting on lifelong learning, a term being used to describe education opportunities outside of a traditional classroom context.
Reach is one of the few venture capital firms that specifically back edtech companies. Others in the category include Owl Ventures, which closed $585 million in a pair of investment vehicles in September, and Learn Capital, which closed $132 million in December.
The pandemic has opened the software market in education and we’re just in the beginning of that opening,” Carolan said. “Education has gone from let’s hire 10 instructional coaches to let’s adopt some software to do that.”
Source: https://techcrunch.com/2021/02/11/reach-capital-fund-3/
SuperAnnotate, a NoCode computer vision platform, is partnering with OpenCV, a non-profit organization that has built a large collection of open-source computer vision algorithms. The move means startups and entrepreneurs will be able to build their own AI models and allow cameras to detect objects using machine learning. SuperAnnotate has so far raised $3M to date from investors including Point Nine Capital, Fathom Capital and Berkeley SkyDeck Fund.
The AI-powered computer vision platform for data scientists and annotation teams will provide OpenCV AI Kit (OAK) users with access to its platform, as well as launching a computer vision course on building AI models. SuperAnnotate will also set up the AI Kit’s camera to detect objects using machine learning and OAK users will get $200 of credit to set up their systems on its platform.
The OAK is a multi-camera device that can run computer vision and 3D perception tasks such as identifying objects, counting people and measuring distances. Since launching, around 11,000 of these cameras have been distributed.
The AI Kit has so far been used to build drone and security applications, agricultural vision sensors or even COVID-related detection devices (for example, to identify people whether someone is wearing a mask or not).
Tigran Petrosyan, co-founder and CEO at SuperAnnotate said in a statement that: “Computer vision and smart camera applications are gaining momentum, yet not many have the relevant AI expertise to implement those. With OAK Kit and SuperAnnotate, one can finally build their smart camera system, even without coding experience.”
Competitors to SuperAnnotate include Dataloop, Labelbox, Appen and Hive .
