Venture Capital: Northwestern Mutual’s VC Arm Makes Maiden Investment In a Female Founded Startup

January 16, 2020 | FinTech, Venture Capital

Northwestern’s VC arm joined a $3.5 million funding round for U-Nest Inc., a California-based financial services mobile app.

U-Nest was founded by Ksenia Yudina, CFA, MBA. The U-Nest app facilitates saving for college and other educational expenses. It helps parents and families to find the right 529 college savings plan. It saves them confusing multi-page forms and processes and instead makes it simple to set up a college savings account. The process is tax-efficient and a better option versus other savings models.

Northwestern Mutual Future Ventures, which participated in the $ 3.5 million funding round, has a war chest of $ 20 million earmarked for investment in female-founded start-ups. U-Nest is the first female-founded investment made out of this fund.

Further, Northwestern decided to invest in U-Nest based on the latter’s rapid progress in extending the reach of the app. It also appreciated additional hiring and establishing awareness of the app’s potential.

Help for female-founded start-ups

“As a female founder, it is essential that the capital you raise comes from a source that believes in you,” said Ksenia Yudina, CEO and founder of U-Nest. “The Northwestern Mutual team recognized that we are quickly becoming part of many families’ saving strategy, 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.”

“U-Nest aligns with our focus on technological disruption and investing in solutions that transform how our clients achieve financial security, as well as our commitment to supporting female-founded startups,” said John Grogan, chief product and innovation officer, Northwestern Mutual. “Saving for college is a big priority for many families’ financial planning needs and U-Nest shares our same goal of making it easier for consumers to secure their families’ financial futures.”

U-Nest investors

Other participants in the seed round extension included Group 11, Unlock Ventures, and additional venture capital firms and angel investors.

Existing investors include The Artemis Fund, Draper Dragon, Unlock Ventures, Vested Ventures, additional Los Angeles-based venture funds, Band of Angels, and other individual angel investors.

Ignorance of college savings plans

While student debt in the US has reached a historic level of $1.6 trillion, 70 percent of people in the US don’t know about 529 plans, says U-Nest. Further, only 14 percent are currently using these plans due to the complexities of its account setup and management.

Meanwhile, a student loan-funded degree has turned out to be a back-breaking burden for too many. The implications of this debt are far-reaching. Students have to take up multiple jobs in their working life. Unable to afford homes, many need to live with their parents. The low disposable incomes crimp demand for new homes and pressures consumer spending.

However, proper financial planning and savings can reduce the need for a student loan, or even eliminate it.

Related Story: #Fuelherfuture: Crowdfunding Platform Kiva Hits $1 Billion In Lending to Female Entrepreneurs                                                  

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