Will Peng graduated from Princeton with about $35,000 in debt.
He asked his immigrant parents what they thought was the best way to pay.
“There were companies telling me I had to refinance my student loans,” said Peng, the eldest of six children born in Taiwan. “I wasn’t sure how to balance paying off my student loans while building an emergency fund and putting money into a 401(k).”
So he googled it and “read a lot of NerdWallet articles” but still “made a lot of mistakes.”
It was then that Peng realized that he was not alone in his struggle and thus the idea of his startup Northstar was born.
Recognizing that receiving financial advisory services is often a luxury reserved for the upper middle class or the wealthy, Peng decided that the best way to make such services more accessible was to partner with employers to offer financial security benefits to their employees.
“We want to build financial security not just for the 1%, but for 100%,” he said.
Especially based in Los Angeles Northstar It has developed personal financial management tools to help guide employees Through a variety of financial and life situations to help them realize the “full value of their compensation, equity and benefits.”
While many of their clients are in the technology space, They “range in size and industry” and include private and public companies, Peng said. For example, Northstar’s Clients include Zoom, Snap, etc. 23 and I, Virgo orbit And surprisingly, Nerd Wallet. The company charges employers Monthly subscription based on head count to Provide employees with one-on-one access to a full-time financial advisor employed by Northstar. Employees do not pay anything and there is no commission.
By pairing employees with the same advisor, Northstar provides a sense of comfort and familiarity rather than having to speak to a different individual every time an employee has a question. And as the company built out its financial advisory team, the company intentionally hired a diverse workforce so employees were more likely to talk to people from similar backgrounds.
According to Peng, who was previously a general partner at Red Swan Ventures for nearly a decade and an early investor in Coinbase, Guideline, Even and Oscar, Northstar’s services seem to be in demand more than ever in the current challenging macro environment.
While the CEO declined to disclose hard revenue figures, he told TechCrunch that Northstar’s revenue has grown more than 5x year-over-year and is expected to grow 3x year-over-year next year. From December 2020 The company has grown its customer base by over 600%.
“We got it Financial security is a broad topic regardless of the distribution channel,” Peng said. “In good times, but especially needed in bad times.”
And today, Northstar is announcing that it has raised $24.4 million in a new funding round led by GGV Capital, which according to Peng took an incredibly quick time to close in a very challenging fundraising environment.
“TThe time from the first meeting to the term paper was about a month,” he told TechCrunch.
New investors PayPal Ventures, Thomson Reuters Ventures and Canvas Ventures are joined by existing backers M13, Workday Ventures, Parade Ventures, Foundation Capital, Designer Fund and RRE participating in the round.
While he declined to disclose the valuation, Peng said the new financing is “on a large scale.”
The importance of its availability is greater than ever because, in Peng’s view, while consumers have access to more “great” devices than ever before, they still lack the knowledge to know what to do with them.
“It actually exacerbated the problem — this unfair assumption that individuals know what to do with their money,” Peng said.
“Financial advice is something that basically everyone needs. It’s not just people with equity compensation, for example,” he added. “If you get paid, if you get benefits, you deserve financial advice.”
Image Credits: Northstar co-founders Matt Matteson (CTO) and Will Peng, CEO
For example, Northstar can help employees understand things like life insurance or whether a high-deductible health plan is the best fit if they’re getting ready to have children.
“It’s a comprehensive approach that combines everything you receive from an employer under one roof,” Peng said.
Currently, Northstar has approximately 50 employees. It is looking to double or triple its headcount in the new funding round. The company also has contractors who act as financial advisors to employees in the 18 countries where Northstar operates, including Canada, the United Kingdom, Germany and France. The company It hopes to be in 30 countries by the end of 2023.
GGV Capital Managing Partner and Northstar Board Member Hans Tung told TechCrunch that his company invested in Northstar because it “shares the vision that financial security should be universal for all employees.”
“While financial advice has been around for many years, most consumers do not have access to affordable and technology-enabled financial advisors, creating a huge market,” he said. “As a global investor, we are looking for companies that want to democratize technology for underserved markets and ‘go global.’
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