Blooom announces layoffs, new strategic focus on consumers

Refocusing its outbound efforts to solely target consumers, financial tech startup Blooom has laid off nearly a third of its staff and a top executive has resigned.

The Leawood-based company recently announced that it has let go of 10 employees as it moves resources away from marketing to enterprises and will refocus on direct-to-consumer marketing.

Blooom CEO Chris Costello said that the layoffs — which takes Blooom’s headcount from 34 to 24 staffers — were extremely difficult.

“The decision to let 10 people go was the hardest thing I have had to do in my 22-year professional career,” he said. “What made it so difficult was that the reduction in staff had nothing to do with their individual performance – it was all about aligning our staff and necessary experience for our focus on direct to consumer growth.”

Blooom helps users grow their retirement savings using a proprietary online tool that analyzes their 401(k) and shows its health through a flower in various growth stages. It then offers ongoing professional advice on how to allocate funds.

In conjunction with the layoffs and marketing shift, Blooom president Greg Smith — who focused on large enterprise partnerships — has resigned from the company.

Costello said that Blooom continues to support its existing corporate clients and that it will still onboard new enterprise customers. The primary change, he said, will be how Blooom is allocating resources and playing to its strengths of connecting with individual 401(k) participants.

“Trying to optimize growth for both B2B and B2C channels meant we weren’t doing either at 100 percent capacity,” he said. “Dividing our attention across individuals and multiple intermediaries muddied — for a whole host of reasons — this singular aim of helping the people who need help the most.”

In February, Blooom raised $9.15 million in an oversubscribed Series B round featuring big names in finance tech investing, including QED, based in Alexandria, Virginia, and San Francisco-based Commerce Ventures. Blooom now has more than $800 million in assets under management and 7,500 clients.

Costello said he believes Blooom is in a fantastic position to grow.

“I have never been more excited about Blooom’s future than I am today,” he said. “We have the right people in the right roles, incredibly supportive investors, and the singular focus of helping the often neglected individual 401(k) participant, which is so empowering to all of us at Blooom.”

Smith, who joined Blooom in 2015 as president, said he’s on good terms with Costello and thankful for his time with the company, of which he’ll remain a shareholder and cheerleader. Smith said that during his tenure, he was thrilled to see Blooom take on more than $13 million in investment capital, snag national media attention and bring the company’s solution to thousands of Americans.

Smith, who will be returning to New York City to work in the financial tech space, said he’s been impressed with Kansas City’s innovative spirit.

”I feel super proud and grateful to have worked for Blooom and helped grow the company,” he said. “Kansas City is one of the nation’s most entrepreneurial cities and I have been so impressed with everything going on in the community, in particular, downtown, where I have so enjoyed living. Most importantly I am so grateful to all my friends and the wonderful and warm people that have been so gracious and warm to me. I look forward to continuing to cheer on KC’s success.”

Founded in 2013, Blooom was recognized as one Startland News’ Top Startups to Watch in 2017.