Blooom co-founder dissects $4M raise
October 19, 2015 | Bobby Burch
Financial tech firm Blooom recently snagged one of the Kansas City area’s largest funding rounds in months.
QED Investors from Alexandria, Va., led Blooom’s $4 million Series A round, which also included investments from DST Systems Inc., Commerce Ventures, Hyde Park Venture Partners and UMB. The Leawood-based firm plans to use the funds to hire new sales staff and accelerate development of its web-based 401(k) tool.
Blooom created an online 401(k) management tool that helps users grow their account through professional management. The tool uses a flower in various growth stages to symbolize the health of one’s 401(k) and offers professional advice on how to allocate funds. Founded in 2013, Bloom now has 18 people on its staff.
Blooom co-founder Chris Costello recently shared with Startland News his thoughts on the round and what it means for his fast-growing firm.
On what the round means for Blooom …
This takes the financial pressure off the three co-founders, having bootstrapped Blooom the past two-and-a-half years. And it will give us plenty of time and resources to prove out which channels will allow Blooom to scale the fastest.
On completing the round …
I worked closely with our president, Greg Smith, over the past four months on this. It certainly involved a lot of our time but we went into this process with the mindset that we need to take our time to be sure that we will be working with the right kind of investors. I guess I wasn’t too worried about finding the money for Blooom so we wanted to focus on finding the right kind of money. By that I mean people that can add real value beyond just writing a check — whether this can be a value-add from an operational, marketing, technology or strategic perspective. I am happy to report we can check all of those boxes with the investors and corporations that came together to fund Blooom.
On strengths of Blooom’s investors …
Our lead investor is QED Investors. They were one of the earliest investors in Credit Karma and also invested in SoFi, Prosper and Braintree. They are largely former CapitalOne executives, including Nigel Morris who was one of the founders of CapitalOne. We think they will be immensely helpful in helping us with our direct-to-consumer marketing channel.
On landing local investors …
We are very excited about the two local Kansas City companies that invested in this round: DST Systems and UMB. We are very eager to show the country that innovation can come from the Midwest and we are quite proud that two long-standing, established Kansas City companies are supporting us.
On Blooom’s plans …
Execute, execute, execute. We have an elegantly simple product for a huge market that badly needs something like Blooom. Now we just need to execute on the mission.
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