San Francisco, CA – April 28, 2021 – CollegeBacker, the social savings platform that brought digital investment advice to 529 plans, has rebranded to Backer (at backer.com) and raised $8.4 million in venture capital.
Backer’s latest round of funding was led by Crosslink Capital with participation from Rally Ventures, Correlation Ventures, and Expansion Ventures. Jim Feuille, early investor and board member at Chime, Pandora, and Personal Capital, has joined the Backer board. Other investors include SoFi co-founder Dan Macklin, Patreon co-founder Sam Yam, veteran fintech investor Tom Blaisdell, along with Reach Capital, Ulu Ventures, Great Oaks Venture Capital, and several universities (Princeton, Dartmouth, and USC).
“From day one, our mission has been to revolutionize how Americans save money by making the process more collaborative,” said Backer founder and CEO Jordan Lee. “We started with a social college fund powered by a 529 plan because parents were clamoring for a more modern way to save. As Backer, we will continue to propel the 529 industry forward technologically and support our families in new ways, making it easy to help loved ones arrive at life’s biggest milestones with financial security.”
Backer’s rebrand comes in part because Congress has been steadily expanding the use of 529 plans beyond traditional college costs to include K-12 private school, apprenticeship programs, student loan paydown, and more.
“Backer has done something truly novel: make saving money a social activity,” said Jim Feuille of Crosslink Capital. “Much like Chime, they picked a difficult, unsolved problem and remained focused on it for years. By harnessing what motivates us all – our relationships with the people we care about – they are bringing a powerful financial tool to a wider audience.”
Backer has already helped its clients save $20 million for college, with 40% of the money coming from family and friends – a rate of gifting that’s 30x higher than the industry average. In recent years, 529 plans have struggled to overcome a reputation for being more popular with affluent families, but Backer’s audience reflects the diversity of America: 60% of its customers are women, 70% have a household income below $100K, and 50% are non-white.
“Educational attainment is a foundational element of a child’s future success, and Backer is helping more kids get the access they deserve,” said Miriam Rivera of Ulu Ventures. “If you go back 25 years, 529 plans were originally conceived to help ordinary Americans put their kids on the path to college, but they have fallen short of that mandate. By making college savings more inclusive and collaborative, Backer is not only democratizing access to 529 plans, it is pioneering a new, more collaborative phase of fintech.”
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Alyona Minkovski