Days after closing what it says is the largest seed funding round in the senior finance space, Sagewell Financial Inc. has launched a digital banking platform built for retired Americans.
Sagewell’s platform, which launched today, is an online banking system tailored to the needs of older Americans, with features like personal retirement advocates for each member and early payment of retirement benefits.
This is the Cambridge-based company’s first product. Sagewell was founded in February 2021 by Sam Zimmerman and Jeff Wright. Zimmerman was most recently the chief technology officer of the PathCheck Foundation, a Covid-19 contact tracing company, and co-founder of Freebird, a consumer travel insurance startup acquired by Capital One in August 2020. Wright has two decades of experience developing financial products at Liberty Mutual Insurance and Plymouth Rock Assurance.
“I really love sleepy consumer industries, sleepy financial services, where the consumer has been forgotten, and launching a new product that is more user aligned, better for the consumer,” Zimmerman said. “I think there’s so much good work to be done for [retirees].”
One of the main challenges retirees face is managing multiple income streams, Zimmerman said, including social security, pensions and 401K funds. He said some programs distribute funds on the last business day of the month or once every 60 days, creating financial uncertainty.
“Retirees have to stitch together these complicated retirement income sources that are actually interconnected. You can make mistakes,” Zimmerman said.
To solve this problem, Sagewell says its MyPaycheck product blends these retirement income sources into a regular, bi-weekly check.
Another key component of the Sagewell platform is the personal retirement advocate, Zimmerman said. Sagewell pairs its members with a U.S.-based retirement advocate to manage their checking account, find savings opportunities and answer questions regarding Medicare and other programs.
“For the vast majority of our users, they’ve gone to the bank once a week. They know that teller. And that digital change that Covid [caused] has accelerated bank branch closings around the country,” Zimmerman said. “And so, in building banking and benefits for America’s retirees, we said it needs to be personal.
It's free to create a Sagewell account and to receive MyPaycheck, Zimmerman said. He added that the company’s “pricing will be evolving for different levels of service” and encouraged interested readers to contact Sagewell with questions about the different features of its new platform.
The platform was built from $1.2 million in pre-seed funding that Sagewell raised in May 2021. Sagewell closed a $5.27 million seed funding round this month, and the funds will be used to build out the platform’s services and scale the organization to serve more customers, Zimmerman said.
Sagewell has seven employees, he said, but is currently hiring software engineers and retirement advocates. The company plans to have around 17 employees by the end of 2022. Sagewell is prepared to handle tens of thousands of users over 2022, Zimmerman said.
To build the platform, Zimmerman said they consulted with experts on the topic, including accessibility experts who helped build HealthCare.gov, hundreds of retirees and their own parents.
“Many of our moms were part of our beta users,” Zimmerman said. “We want to make sure that what we’re shipping is worthy of our parents.”
