As representatives of Northwestern Mutual get deeper into financial planning, the investment arm of the firm is funding an app designed to make college funding easier. College savings app U-Nest announced a seed round of $3.5 million this week, with funds from Northwestern Mutual Future Ventures, Group 11 and Unlock Ventures, among others. The app facilitates paperless 529 account openings.
Just as many advisors are loath to open new accounts using paper-based methods, end investors are tired of opening 529s in a format that’s anything less than digital, said Ksenia Yudina, CEO and founder of U-Nest. Her firm is championing a 5-minute setup process for the accounts, which attracted the attention of the insurance firm. “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,” said Yudina. “These are crucial financial decisions and require more direct and transparent solutions than what has been available previously."
With saving for college weighing heavily on the minds of parents, U-Nest's partnership with Northwestern Mutual will eventually is meant to help prepare advisors for conversations about college savings with young families, added Yudina.
With the U-Nest investment, the firm is moving from love and marriage to the baby carriage—or at least the realities of funding college savings accounts early on. Last year Northwestern Mutual ran a campaign around wedding planning and marriage counseling, seeking to engage clients that are planning for another major life event.
Indeed, depending on the success of the investment, Northwestern Mutual is ready to “explore what collaboration could look like” with the app, said Craig Schedler, managing director of Northwestern Mutual Future Ventures. He views U-Nest as a “strategic” part of a reworked client experience for the firm. “Ksenia and her team have been able to leverage technology to simplify and streamline the process of opening a 529, which many consumers find to be complicated and time consuming,” he added.
The Northwestern Mutual venture funds are part of a $20 million fund, earmarked for female-founded startups, that was announced last year. U-Nest is the first company to be selected by the investment arm. Funds will go towards bolstering U-Nest’s support team, making product improvements and broadening the firm’s outreach and partner network.