By Lars Mucklejohn
London-listed fintech Pensionbee has announced its expansion into the US retirement savings market as it nears profitability following a jump in customer numbers.
The pensions platform said on Monday it had entered into an exclusive, non-binding term sheet with an unnamed “large, US-based global financial institution”.
Pensionbee noted that the US has the world’s largest market for defined contribution pensions, with $22.5tn in assets making up around 80 per cent of the global total.
Under the agreement, Pensionbee said it would create a wholly-owned subsidiary called Pensionbee Inc in Delaware, with operational headquarters in New York.
The firm said the business would allow US consumers to easily consolidate and roll over their 401(k) plans%20is%20a,can%20contribute%20to%20employees'%20accounts.) into a new individual retirement account.
Under the proposed strategic relationship, Pensionbee said it would manage the US business’ operations and hire a local team, while the partner would provide “expertise and substantial marketing funding.”
Pensionbee expected to launch the US business in late 2024, with a final binding agreement dependent on “confirmatory due diligence, legal documentation and regulatory approvals”.
It added: “Given the context of the enormous US market opportunity, Pensionbee sees the potential for its US business to grow rapidly, becoming at least the size of its UK business over the next decade.”
The firm expects to post its first annual profit in 2024. In a trading update in January, it reported a 56 per cent jump in invested customers and a 38 per cent surge in revenues to £18m in 2023.
Assets under administration swelled 44 per cent to £4.4bn, with around 250,000 invested customers.
Romi Savova, chief executive of Pensionbee, said on Monday: “In the year of our 10th anniversary, having demonstrated underlying profitability, we have entered discussions with a view to deploying our award-winning customer proposition, supported by our innovative technology platform and marketing approach, in the United States of America. This is a transformative step for PensionBee and for our stakeholders.
“By entering the world’s largest defined contribution pension market, where many consumers still struggle to prepare adequately for retirement amidst an array of confusing and difficult to use investment options, our straightforward approach to online retirement savings will help millions of consumers look forward to a happy retirement.”
