Los Angeles-based fintech startup UNest raised $9 million in a funding round announced Wednesday. The round was led by Anthos Capital and NBA All Star Baron Davis. The company will use the new funding to speed up its growth and hire additional staff support.
UNest provides financial planning services in addition to savings tools that help and encourage college students along their educational journey. According to the company, it aims to simplify the laborious and confusing process of completing a 529 savings plan. After parents enter their child’s age and when the money for college will be needed, the UNest app tracks progress toward reaching that specific savings goal.
Accounts on UNest cost $3 per month to maintain and any financial growth within the account is tax-free. Parents must invest a minimum of $25 per month and can contribute any amount beyond that, up to $15,000.
“We are quickly becoming part of many families’ saving strategies, and, for some, the first step to financial responsibility. These are crucial financial decisions and require more direct and transparent solutions than what has been available previously,” Ksenia Yudina, co-founder and CEO of UNest, said in a statement.
Saving for college is a timely concern. The average published tuition and fees for four-year colleges and universities in the United States increased by 35 percent from 2008 to 2018, according to data from the College Board. In the U.S., savings in 529 plans have increased from $133.4 billion in 2009 to $371.5 billion at the end of 2019, according to data from the College Savings Plan Network.
Davis told TechCrunch his investment in UNest represents “a great opportunity to help my community.”
“It aligns with my vision that all kids deserve a chance to get an education and have equal opportunities in life regardless of their race or ethnicity,” Davis continued. “All kids should have access to the financial resources that make these goals achievable.”
According to the company, since its public launch earlier this year, more than 20,000 users have set up UNest accounts. The company has raised a total of $12.8 million in venture capital to date, according to Crunchbase.