Fast-growing startup Honest Dollar, which helps small businesses open employee retirement accounts, has been acquired by Goldman Sachs.
The Austin-based company was founded in 2014 by William Hurley, a serial software entrepreneur known as "whurley," and investment specialist Henry Yoshida, who left the company last year.
Honest Dollar lets employees of small- and medium-sized businesses, self-employed individuals and independent contractors begin saving and investing for retirement by establishing individual retirement account-based savings programs.
"Honest Dollar has created a simple solution to a complex retirement savings problem," Timothy O'Neill and Eric S. Lane, co-heads of IMD at Goldman Sachs, said in a statement. "Together we have the potential to help millions of people achieve their investing goals."
Financial terms of the deal were not disclosed.
The company says it costs as little as $8 per employee per month to create a retirement-savings account on its web-and mobile-based platform. Hurley said the cost is about 25 percent of the conventional management fee while avoiding the legal liability of employers sometimes sued for hidden fees.
When employees enroll, they are asked a series of questions and one of six portfolios is recommended to them. All the portfolios are made up of four Vanguard exchange-traded funds.
Hurley said Honest Dollar wanted to bring simplicity and transparency to a market that's often a minefield of hidden fees.
"When people are paying 2 percent in fees - that's criminal," Hurley told the New York Times last year. "Between you and your retirement, there's lots of exit routes for your money."
About 45 million Americans do not have access to employer-sponsored retirement plans, according to Goldman Sachs.
Honest Dollar was backed by $3 million from a syndicate of investors including Expansive Ventures, Formation 8 and Core Innovation Capital, all of California.
"We set out with a singular focus: to revolutionize the retirement industry and reach individuals who historically have been underserved," Hurley said. "We look forward to being part of Goldman Sachs as we drive innovation across this space together."
Hurley was formerly chief innovation officer at Austin technology studio Chaotic Moon.
Honest Dollar, which has 25 employees, will remain based Austin and will be part of the Investment Management Division of Goldman Sachs.