The “free burrito” strategy must have worked.
Blooom, the robo advisor that focuses on managing 401(k)s and 403(b)s, announced Wednesday that it reached $300 million in assets under management in just 20 months. The Kansas-based startup said that’s a faster rate than “prominent independent robo advisors in New York City and Silicon Valley,” referring to Betterment and Wealthfront, respectively, and with less than one-fifth the venture capital funding at a similar stage.
The company has analyzed more than $1 billion of 401(k) balances and doubled the size of its business in 2016, making blooom the fastest-growing robo advisor, according to monthly ADV filings. That may be due in part to unique marketing, such as a March campaign where blooom partnered with Chipotle to give away burritos to anyone who synced up their 401(k) account, but CEO and co-founder Chris Costello credits his product to more than a free lunch.
“Most of our growth has been organic, through word of mouth, because our clients—everyday, regular Americans in all 50 states—see how meaningfully we can improve their 401(k), cut their hidden fees and potentially add years in retirement,” said blooom CEO and co-founder Chris Costello in an official statement.
Greg Smith, blooom’s president, also announced that the company had recruited Sheila Bair, the Federal Deposit Insurance Corporation chair from 2006 to 2011, to serve as its first advisory board member. Bair was known for her pro-consumer approach during the financial crisis and earned the nicknames “the little guy’s protector-in-chief” and a “new sheriff of Wall Street.”
“We can not think of anyone in the country better suited to help guide blooom in our mission to help millions of Americans save more money,” Smith said.
Bair is also on the board of directors at Avant, an online lending start-up that recently laid off 7 percent of its workforce and delayed plans to expand into new businesses like credit cards and refinanced car loans. Bair also serves as the president of Washington College.
“Blooom is an incredible tool that brings transparent pricing and unconflicted advice to the millions of Americans who now, more than ever, need help keeping their costs low and choosing appropriate investments,” Bair said. “I applaud blooom’s mission and progress.”