Target Audience: 99% of the Population

1. College and university students represent a significant market; in the United States alone, there are 20 million of them. And this is despite the claims that “higher education is dying” 😉
2. The catch is that practically each of them is looking for opportunities to earn extra money. Ideally, not as a waiter or cashier at McDonald’s 😉 Something more interesting or related to their field of study would be preferable.
3. On the other hand, companies also need to find real and potential employees. So why not connect them with each other? However, in doing so, it’s important to consider nuances and examples like these:

Project Essence

NewRetirement urges people to “take their financial well-being into their own hands” by engaging in financial planning for their lives.

The very name of the NewRetirement project implies that the goal of this planning is to accumulate enough money to live comfortably in old age after retirement.

Unlike many other financial planning apps, which focus either on distributing the current family budget or on investments, NewRetirement considers a more comprehensive picture — one that also takes into account the cost of medical care, expenses covered by the government insurance system, taxes, inflation, and all other factors that could affect current and future expenses and income.

First, all sources of information about current income, expenses, and assets need to be connected to the platform — bank accounts, information about owned real estate, debts, medical expenses, and other sources of information.

After that, you can continue living as you did 😉 However, the platform will monitor your financial situation and periodically advise on what changes can be made to optimize future financial flows — redistribute existing assets within the retirement plan, start paying a bit more on the mortgage to settle it faster and pay less overall, and so on.

The most interesting part of the platform is its ability to run various scenarios at the push of a button based on the “what if” principle. For example, if I sell my apartment and move to another state, how will it affect my assets and taxes compared to staying where I live now?

By the way, the hints regularly provided by the platform are also based on scenarios. The platform periodically runs many different scenarios on the stock market, real estate, and other financial markets in the background — and suggests actions that should be taken right now to stay afloat in any scenario or come out ahead in a favorable scenario.

Additionally, the platform constantly shows the user where exactly they are on the path to achieving their desired level of financial well-being. It indicates whether urgent action is needed to get back on track.

NewRetirement is not just a financial planning program. It’s an entire infrastructure where the user doesn’t remain alone with their financial problems.

There is a financial literacy education program, regular webinars on financial topics, coaches to work with individually on developing a personalized financial plan, a support chat where any question can be asked at any time, a community where one can benefit from “crowdsourced help,” and the opportunity to receive consultations from a certified financial consultant.

The app can be used for free in “calculator” mode. The full functionality of the service is available on a paid subscription costing $120 per year. Advice from a certified financial consultant averages $1,500 per year depending on the complexity of the task assigned to the consultant.

The startup is making separate efforts to implement a B2B2C model — reaching out to businesses that can provide the service to their audience. These could be employers offering access to the service to their employees, financial consultants granting access to the service to their clients, or financial organizations (such as banks) that include the service in their package of services for their clients.

These companies have the opportunity to brand the service with their own logos — so that clients or employees feel that the service was developed by the company itself.

Currently, the service has around 70,000 active users, of which 20,000 are individual users, and the rest are clients or employees of startup partner companies. The startup receives 70% of its revenue from companies.

NewRetirement has raised $20.8 million in investments, increasing the total investment in the project to $32.6 million.

What’s Interesting

Today’s startup, although providing tools for “regular” financial planning, has focused on the problem of financial well-being after retirement, as even implied in its name.

Why such a focus on pensions? Because pensions are about to face a major crisis!

The problem lies in the fact that life expectancy has begun to increase sharply — while the pension systems of all countries were not designed for this. Their budgets were based on payments, roughly speaking, for 5-10 years, the average lifespan between retirement and death — but this period is noticeably increasing.

For example, in the United States in 2020, there were 28.4 people of retirement age per 100 inhabitants — and by 2050, there will be 40.4. In Spain, it was 32.8 — and it will be 78.4. In China, it was 18.5 — and it will be 47.5. And the same will happen in all countries around the world.

Therefore, the slogan of the startup that it’s time to “take control of your financial well-being [in retirement]” is not a kind wish, but a harsh necessity ☹️

Moreover, 80% of all assets of the population, taking the United States as an example, are concentrated in the hands of people born between 1946 and 1964 — who are on the verge of facing the problem of life in retirement, and something needs to be done about it right now.

Despite this, 65% of Americans do not have formal financial plans. However, 40% have already “thought a little” about the need for such a plan — but have not taken practical steps in that direction.

By the way, it’s a very good sign that they’ve “thought a little.” It means that these people don’t need much convincing — just a little push 😉

The most common reason for the absence of a financial plan is “not enough money to make a plan.” Although, logic suggests that a financial plan is critically necessary precisely for those who lack money 😉 Because those who have enough money will manage somehow even without it.

Other common excuses include “it’s too complicated,” “there’s no time for it,” “consulting financial advisors to create a plan is too expensive.” And the cherry on top is “nothing has happened in my life yet to make me start making a financial plan.” However, when that happens, it may be too late ☹️

Startups focusing on financial planning are becoming popular now. Moreover, most of them sooner or later switch to the B2B2C model, ceasing to chase after individual users one by one.

LearnLux, which I wrote about in the fall of 2022, raised another $7.1 million in investments in February of this year, thereby increasing the total investment size to $24.2 million.

Origin, which I wrote about in the fall of 2021, raised $72 million.

Where to Go

Some services, aiding people in achieving financial well-being, position themselves as “exclusive clubs” capable of doing so. Like the Indian startup The 1% Club, which raised $1.2 million, about which I wrote in November last year. It claims that only 1% of people are financially independent now — and invites people to join this 1%.

But the biggest money can be made by making financial planning a habit for the remaining 99%! And that’s exactly where to aim, positioning and promoting your service in this area.

But how to achieve this? Perhaps the secret lies in transitioning from general words about financial planning or well-being to setting a specific goal. And it should be a long-term goal to keep people tied to it for a long time.

Such a goal could be the task of saving money for life, not just for retirement, as this problem is relevant precisely for the remaining 99% of people. Today’s NewRetirement has already formulated this goal in its name — however, in the text of the website, this goal again dissolves into a bunch of general words. Although, firstly, the simpler — the better. And secondly, to convey a thought to the user, you need to repeat it 100 times 😉

However, the very idea of the necessity of financial planning and especially ensuring one’s own life in retirement in the face of the looming pension system crisis is an important and critical problem that needs to be addressed by 99% of the Earth’s population.

Thus, the possible direction of movement is the creation of a financial planning service that will finally be wrapped in such an attractive package with such a simple and clear offer to reach out to a potential audience of billions.

One of the possible options is precisely saving for future retirement, which today’s NewRetirement has started moving towards.

The problem is critical. It has now become even more relevant. The size of the potential audience is enormous. It remains only to start proposing and testing hypotheses on how this potential can be realized.

What offer in this area can break through the wall of indifference, composed of “too complicated,” “no time,” and “someday later”? What simple tools are needed to support this offer? Through which channels, besides advertising, can such a service be effectively promoted?

About the Company
NewRetirement
Website: newretirement.com
Last round: $20.8M, March 27, 2024
Total investments: $32.6M, rounds: 5