With $300M under management, Blooom is the fastest-growing robo advisor

Jun02, 2016

With $300M under management, Blooom is the fastest-growing robo advisor

Area financial tech startup Blooom has another trophy for its chest of commendations.

The Leawood-based firm says its online tool to grow users’ 401(k)s has reached $300 million in assets under management in only 20 months. That swelling growth makes it the fastest-growing robo advisor ever — years faster than competitors in New York City and Silicon Valley, the company said.

A former Goldman Sachs banker, Blooom president Greg Smith said it’s a remarkable accomplishment.

“Blooom achieved this milestone in approximately half the time of other robo-advisors and while needing to raise less than one-fifth of the outside capital,” Smith said, citing monthly SEC filings.

In addition to 100 percent revenue growth in 2016, Smith said that Blooom has analyzed the health of more than $1 billion 401(k) balances. Blooom’s tool analyzes a user’s 401(k) and shows its health through a flower in various growth stages, then offers professional advice on how to allocate funds. To access Blooom’s services, users pay $5 per month for an account less than $20,000, $19 per month for accounts between $20,000 – $500,000 and $99 for accounts more than $500,000.

Blooom CEO Chris Costello said that the platform resonates well with younger people who lack knowledge about their 401(k)s and are more apt to conduct financial transactions online. 90 million Americans have a 401(k) or similar retirement account, but Costello said nearly 90 percent of those people are unaware of their investment strategies and don’t receive professional guidance.

Costello said that the company is scoring customers thanks to the simplicity of its platform to improve 401(k)s.

“Most of our growth has been organic, through word of mouth, because our clients,” Costello said in a release “Everyday, regular Americans in all 50 States see how meaningfully we can improve their 401k, cut their hidden fees and potentially add years in retirement.”

The company also announced Wednesday that former Federal Deposit Insurance Corporation (FDIC) chairwoman Sheila Bair has joined Blooom as an advisory board member. Named the most powerful woman in the world in 2008 and 2009 by Forbes, Bair served as FDIC chairwoman under Presidents Barack Obama and George W. Bush. She was dubbed “the little guy’s protector in chief” and “a new sheriff of Wall Street” by TIME Magazine for her federal work during the Great Recession.

“I am very glad that blooom is doing its part to restore the good name of innovation and financial services by serving an overlooked segment of retirement savers,” Bair said in a release. “Blooom is an incredible tool that brings transparent pricing and un-conflicted advice to the millions of Americans who now, more than ever, need help keeping their costs low and choosing appropriate investments. I applaud blooom’s mission and progress,” Bair added.

The company has been on a solid hot streak as of late. In addition to a $4 million raise in October, Blooom won a $50,000 grant from the national LaunchKC competition and a $10,000 grant in a national Kauffman Foundation pitch contest. The company was also named a Top 10  Startup to Watch in 2016 by Startland News.

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