401(k) Platform Basic Capital Raises $25mm

Basic Capital, an innovative 401(k) platform, announced that it has raised a $25mm Series A round led by Lux Capital and Forerunner Ventures. Apart from being a rare 401(k) platform built on a modern tech stack, they offer participants the ability to leverage their returns by lending them $4 for each $1 they invest.

The general idea is that the investors get to potentially compound their savings faster, so long as the market goes up. In return, Basic Capital gets a decent interest rate and 5% of the appreciation when the assets are eventually sold. They also have a "one-click" Roth IRA rollover, which is the optimal number of clicks compared to a typical 401(k) transaction, which can be rather involved, lengthy, and full of friction.

Given their penchant for innovation, and considering they have $25mm and a modern tech platform, perhaps they will be one of the first to take advantage of any new opportunities that arise out of President Trump's executive order exploring alternative investment use in the 401(k) market. We would very much like to see that, although perhaps without the leverage.