In huge news coming out of South by Southwest Interactive, the Investment Management Division of Goldman Sachs announced plans on Monday to buy Honest Dollar, a web and mobile-based retirement savings platform that launched at the show last year.
The terms of the deal were not disclosed.
William Hurley, known as Whurley, former founder of Chaotic Moon in Austin founded Honest Dollar with Henry Yoshida, who worked in corporate retirement and was a former Merrill Lynch financial advisor. Yoshida left the company last year.
Honest Dollar provides a way for small startups and medium sized businesses to provide retirement savings accounts for their employees. It also provides retirement accounts to individuals. Honest Dollar makes it easy for anyone to set up an IRA account and begin saving for retirement by putting away as little as $10 a week.
The market Honest Dollar is tackling is huge and largely ignored by the financial industry. It’s the market of the growing workforce of independent employees which number around 53 million today including contractors, part-timers, freelancers and solo business owners. That is a growing market which is expected to increase to 66 million just in the U.S. by 2020.
Last year, Honest Dollar partnered with Lyft to provide retirement savings accounts to its contractor workforce. The programs are designed to allow employees, known as 1099 contract workers, to save for retirement through Lyft, which has more than 100,000 drivers.
“Honest Dollar has created a simple solution to a complex retirement savings problem,” Timothy J. O’Neill and Eric S. Lane, co-heads of IMD at Goldman Sachs said in a news release. “Together, we have the potential to help millions of people achieve their investing goals.”
“We set out with a singular focus: to revolutionize the retirement industry and reach individuals who historically have been underserved,” Whurley, CEO of Honest Dollar, said in a news release.
Last year at SXSW, Honest Dollar won the Austin Technology Incubator’s Release It pitch competition.
Honest Dollar, which is based at WeWork on Congress, raised $3 million last March from Expansive Ventures, Formation 8 and Core Innovation Capital.
Honest Dollar plans to stay in Austin. The deal is supposed to close in the second quarter of 2016.