Why Centana Invested in 401GO
Author: Ben Cukier | Co-Authors: Jack Babbush, Liam Mickelsen
The Persistence of the SMB Retirement Gap
For millions of small- and mid-sized businesses, offering a 401(k) has long meant high costs, manual payroll syncs, compliance headaches, and long onboarding cycles. These hurdles have often proved too difficult to vault, prompting many resource-strapped business owners to forgo offering a plan outright. In recent years, however, small-business retirement plan adoption has grown steadily. Regulatory changes like Secure 2.0 have helped ease cost barriers through tax credits, and state governments have implemented mandates requiring employers to offer retirement savings options. Despite these regulatory nudges in the right direction (or perhaps shoves in the case of mandates), the administrative and cost headaches are proving hard to overcome. In 2024, only 54% of small businesses offered retirement plans, and, while that is up from 47% in 2020, there is still a long way to go1. To achieve broad adoption and support the upcoming demand from state mandates, the ecosystem needs a solution that gets employers up and running smoothly (and compliantly), is cost efficient, and makes participation simple for employees.
Better Technology Bridging the Gap
401GO built its platform with these needs in mind. Rather than relying on third party systems, 401GO developed its own core recordkeeping and plan-administration technology stack, an investment that is intended to support its customers as the company grows. The 401GO platform is designed to be more nimble than incumbent recordkeepers, exemplified by its strong integration with payroll providers and its adaptability to different regulatory requirements. The team has also automated many of the administrative tasks that typically trip up smaller HR teams like eligibility, notices, deductions, testing, corrections, and year-end filings. With 401GO, employers can launch plans in minutes, help contributions flow automatically, and rely on built-in compliance guardrails. It’s a solution that is designed to minimize support needs. When support is required, the team takes pride in delivering a responsive, human touch.
While 401GO sells directly to employers, they also stand on their excellent reputation of working with distribution partners in the Human Capital Management space, like Heartland and isolved, and Financial Advisors. The strength of the technology and service at 401GO make them a solution that their partners often recommend with confidence, and one that we at Centana are proud to support.
Centana’s Experience in the Retirement and Benefits Ecosystem
Centana has deep expertise partnering with wealth, asset management, and benefits solutions providers, and a long track record of investing in growing companies within the fintech industry. Investments across adjacent, regulated financial infrastructure include Employee Navigator (HR benefits modernization), AlphaSense (financial intelligence and research), and True Link (financial wellness platform for at-risk individuals). Members of Centana’s investment team have prior investing experience with Financial Engines, Aspire, PowerShares, Velocity Shares, ETF Securities, and IndexIQ from previous firms. Dedicated thematic work on advisor, broker-dealer, and payroll-connected workflows has helped us understand the pain points financial advisors face and the limitations of legacy recordkeeping stacks. We bring deep connectivity to broker-dealers, RIA platforms, leading payroll/HCM providers, and recordkeepers, relationships we expect will be helpful as 401GO continues to develop.
The 401GO-Forward
We are excited to partner with Dan Beck and the entire 401GO team to support the company’s next stage of its evolution. The company has significant opportunity ahead of it with new and expanded partnerships, and with favorable regulatory tailwinds, we expect that the additional capital will support 401GO as it seeks to meet incoming demand and help bring 401(k)s to more Americans.
[1] https://www.plansponsor.com/whats-driving-the-small-plan-market/
Important Disclosures
This post is for informational purposes only and does not constitute investment advice, an offer to sell, or a solicitation of an offer to buy any securities. Centana Growth Partners has invested in 401GO and has financial interests in the company’s success.
This document contains forward-looking statements regarding 401GO’s business, market opportunities, and potential growth. Actual results may differ materially from those anticipated in these statements due to various risks and uncertainties, including market conditions, competitive factors, regulatory changes, and execution risks.
Performance metrics and market statistics referenced in this document are based on third-party sources believed to be reliable. Past performance is not indicative of future results.
