Goldman Sachs struck a deal to buy Austin, Texas-based startup Honest Dollar. The fledgling company serves small businesses who want to set up retirement-saving programs for their staff. In a statement announcing the deal, Goldman Sachs noted that there are about 45 million Americans who don’t have access to employer-sponsored retirement.
Honest Dollar is a web- and mobile-based company that seeks to take the hassle out of setting up retirement plans for small businesses. Forbes reports that Honest Dollar is one of several startups who are looking to upend the traditional employer-sponsored retirement business.
Timothy J. O’Neill and Eric S. Lane, co-heads of Goldman’s investment management group, stated in the press release that “Honest Dollar has created a simple solution to a complex retirement savings plan.” They added, “Together, we have the potential to help millions of people achieve their investing goals.”
Honest Dollar’s platform claims to help employers sign up in under 90 seconds. The company charges as little as $8 per employee per month to set up a retirement-savings account. Once employees are set up in the system, they as asked a series of questions that will recommend one of six portfolios to them.
The portfolios are made up of four different Vanguard exchange-traded funds, notes Business Insider. Employees can contribute up to $5,500 to an Honest Dollar IRA pre-tax.A 401(k) contribution limit is $18,000.
Honest Dollar won the 2015 ReleaseIt at SXSW competition. It was founded by William Hurley, co-founder of Chaotic Moon, and Henry Yoshida, a former Master Inventor at IBM. Yoshida left the startup in 2015. In the announcement, Hurley noted, “We set out with a singular focus: to revolutionize the retirement industry and reach individuals who historically have been underserved.”
The deal marks Goldman Sachs’ latest foray into financial technology. CEO Lloyd Blankfein has referred to the firm in the past as a “tech company.” It has pub a focus on hiring for its own team, giving away some of its trading technology to clients, and hosting hackathons. Honest Dollar will stay in Austin after the acquisition is complete.