Facet Wealth raises $25M Series B, launches financial planning product for employers

Harbor East-based fintech company Facet Wealth raised $25 million in Series B funding and is rolling out a new product that allows employers to offer its tech-enabled financial planning service to employees.

The new funding round, led by prominent private equity firm Warburg Pincus and including participation from other existing ventures, is designed for expansion of the company’s efforts to offer financial planning services that can be widely available for folks regardless of their wealth level. Operating for four years on a membership-based model with virtual services that include both a certified financial planner and a tech platform that assists with key tasks, the company saw business more than double since the start of the pandemic.

“Facet has always been a primarily virtual company, and all of our client meetings have been done virtually since we started the company in 2016,” said CEO Anders Jones. “When we shut our office for COVID, it was business as usual the next day. Because we had solidified our position as a virtual first company, clients were naturally comfortable with us as a provider, while legacy players scrambled to catch up.”

Additionally, Jones, said the company — which Technical.ly named the top company to watch on our 2019 RealLIST Startups and a nominee for Startup of the Year in that year’s Technical.ly Awards — saw a big influx of inbound inquiries as the financial markets fluctuated in the early days of the pandemic.

“While COVID was an unfortunate accelerant for our business, it solidified our vision of the future,” he said.

Following up on that growth in its consumer-facing business, the company is launching a financial wellness product that employers can offer to their teams. This allows those businesses to offer a variety of financial planning services that provide advice as a benefit. The company said employers including ClassPass, MyVest and ChiliPiper are already offering the service.

“Since our first investment two years ago, the Facet Wealth team has proven their ability to meet a unique consumer need, evolving and expanding their offering to build a truly innovative client experience and business model,” said Jeff Stein, managing director at Warburg Pincus, in a statement. “Their expansion into the employer market further solidifies them as a category-defining company that is well-positioned to disrupt the wealth management industry for years to come.”

The new funding round brings Facet Wealth’s total raised to $62 million. It comes two years after the company raised $33 million in a Series A round that grabbed a lot of attention as Jones talked about moving the company HQ from Silicon Valley to Baltimore. While investment rounds typically tend to increase as companies move forward, Jones said this latest round is “the right amount of money for the business at this moment in time.”

“As we’ve grown, we’ve gotten more capital efficient,” he said. “We didn’t need to do a big round so we didn’t. With that said, we will very likely raise money in the future to fund additional growth and new service offerings.”

The company has grown its team dramatically in the last couple of years, and now has 175 employees. Hiring is poised to continue with this round, as well, as Jones expects it will have a headcount of more than 250 by the end of the year.

Facet Wealth’s virtual nature extended to its own team even before the pandemic, as it brought on remote team members from locations around the country as it grew. But Baltimore is home for many of the employees. The company’s approach is to hire from a national talent pool, but it’s still looking locally.

“We chose Baltimore as our home in part for the talent and plan to continue to source new Baltimore-area employees as we grow,” Jones aid.