As the cost of higher education continues to increase, parents need to save for this investment well in advance of enrollment. UNest is the mobile app that helps parents build financial plans to save for their kids’ educations. A certified digital advisor, the platform enables parents to easily apply for and manage tax-efficient 529s without any of the tedious paperwork conventionally required when set up by a traditional financial advisor or hefty costs. UNest costs just $3 a month and requires a minimum of $25 to open an account. In five minutes, parents can assemble an account and begin the process of saving their child’s education. UNests goal is to help people of all income levels save for college and create the ultimate family college savings solution.
LA TechWatch caught up with CEO and Founder Ksenia Yudina to learn more about UNest’s mission and recent funding round, which brings its total funding raised to $12.8M across four rounds.
Who were your investors and how much did you raise?
The $9M Series A funding round was led by Anthos Capital, and included NBA All-star Baron Davis, Northwestern Mutual Future Ventures, Artemis Fund, Draper Dragon and Unlock Ventures.
Tell us about the product or service UNest offers.
UNest is a mobile fintech app, which provides financial planning and savings tools for parents. Since its public launch in February 2020, more than 25,000 users have set up UNest accounts, all benefiting from its intuitive and cost-effective account setup and interface. The UNest app is quickly becoming recognized as a key resource for families of all income levels and backgrounds to save and invest for their children’s education and other life goals. The app supports UNest’s mission to democratize the availability of quality college and family saving solutions.
What inspired the start of UNest?
I founded UNest after experiencing the pain of paying back close to $200K in student loans and working with families who were trying to save for their children’s future. After earning my MBA and CFA charter, I became a Vice President at Capital Group/American Funds, the largest 529 provider in the United States. I saw the tedious paperwork that stymied financial advisors, and the expensive costs associated with 529 plans, making them typically available only to affluent families. These frustrations, coupled with my own experience with parenthood (I have three kids), served as my inspiration for founding UNest to help democratize financial advice for all families.
How is UNest different?
UNest differentiated itself initially by making the process of applying for and managing tax-efficient 529s exponentially easier. Before UNest parents would typically spend an average of eight hours trying to understand options, identifying a solution, and then apply for a 529. UNest has reduced this to a five-minute onboarding process through its app. Building on its breakthrough functionality, UNest is rolling out products this year that will help families of all income levels save for more than college. The purpose is to strengthen the financial foundation for families of all economic levels and allow them to move to a more sustainable path of saving. UNest is one of the first serious steps to becoming a smart, fiscally-responsible parent.
What market are you targeting and how big is it?
The UNest app is quickly becoming recognized as a key resource for families of all income levels and backgrounds to save and invest for their children’s education and other life goals. This is particularly significant as the majority of US families are not affluent enough to access the kind of financial advice that will help them save for their child’s future. As an example, a commissioned survey by UNest showed that approximately 70 percent of people are unaware that tax-efficient 529 college saving plans even exist. UNest is well-positioned to be the leading option for parents who either don’t have the time to manage an investment account for their kids or have yet to learn about its benefits. The app supports UNest’s mission to democratize the availability of quality college and family saving solutions.
What’s your business model?
We’ve augmented the standard registered investment advisor (“RIA”) model with a simple app that gets rid of the complexity of working with advisors. UNest is certified as an RIA (a digital financial advisor) to help parents build and balance college savings plans aligned with the age of their children. Unlike financial advisors that can cost upwards of $200 per hour, U-Nest has waived all underlying broker-dealer commissions, and the advisory fee is a simple and transparent $3 a month. In addition, the minimum investment to open an account is just $25.
How has COVID-19 impacted the business?
UNest has experienced tremendous growth in recent months despite market volatility and COVID-19 concerns. The company has realized a significantly increased valuation from that of its August 2019 seed round – a result of UNest’s continued, week-over-week growth and the support of industry leaders in financial services and venture capital that are aligned with the company’s mission.
What was the funding process like?
At the outset, it appeared raising funds during the pandemic would be difficult. However, due to the success of the app and strong financials, UNest was able to garner support from a wide variety of investors, such as LA-based Anthos Capital, returning investor Northwestern Mutual Future Ventures, and former NBA All-Star Baron Davis. UNest quickly reached its targeted raise for the round.
What are the biggest challenges that you faced while raising capital?
As a sole woman founder, it was hard to raise capital in the Fintech industry without having a technical cofounder and extensive network. I was fortunate to meet several repeat entrepreneurs who joined as company advisors and helped make the right connections to capital providers.
What factors about your business led your investors to write the check?
Domain expertise, breakthrough product benefits, exceptional team, and a blue sky opportunity in a market with slowly-moving institutional incumbents.
What are the milestones you plan to achieve in the next six months?
UNest is rolling out additional products that will expand its offering beyond college savings to help parents save for other important life events as their kids grow older. Also, we aim to reach 100,000 users by year-end.
UNest is rolling out additional products that will expand its offering beyond college savings to help parents save for other important life events as their kids grow older.
What advice can you offer companies in Los Angeles that do not have a fresh injection of capital in the bank?
Be persistent. It is essential to stay the course. Also, it’s important to rely on investors who believe in you and your company, and who provide value add across your business. Do not limit your outreach to investors in Southern California. If your product, opportunity, and team are strong enough you will attract interest from investors regardless of their location. This is particularly the case if you are operating in a well-defined market sector like fintech.
Where do you see the company going now over the near term?
We are adding to our team and building strong relationships with technology, infrastructure, and distribution partners. These are all key in helping us build on our very strong market entry. We will also accelerate our push to becoming the leading resource for families of all economic levels that want to save for their kid’s future.
What’s your favorite outdoor activity in LA?
Beach activities with my family (Manhattan Beach is our preferred destination).
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