New York, NY - Aug 20, 2025 - Basic Capital, the innovative 401(k) platform empowering workers to amplify their retirement investments through financing, announced the close of its $25 million Series A funding round. Led by Forerunner and Lux Capital, the round includes participation from existing investors SV Angel and Box Group, as well as notable financial figures like Henry Kravis. New investors HOF Capital, Inspired Capital, and Westbound Equity Partners also joined the investment. This funding will accelerate Basic Capital’s mission to modernize retirement plans, bringing leveraged investing and alternative assets to everyday Americans.
Funding Details
Basic Capital has secured $25 million in its Series A funding round, announced on August 19, 2025. The round was co-led by venture capital firms Forerunner and Lux Capital. Additional participants include existing backers SV Angel and Box Group, alongside prominent individual investor Henry Kravis. New investors in the round are HOF Capital, Inspired Capital, and Westbound Equity Partners. This investment marks a significant milestone for the company, which launched its platform in May 2025 and has already attracted a high double-digit number of employer customers, each with an average of around 100 employees.
Strategic Goals and Use of Funds
Basic Capital aims to transform the retirement landscape by making advanced financial tools accessible within 401(k)s and IRAs. The company plans to leverage the new capital across several key areas:
- Accelerate Platform Adoption: Expand outreach to employers, targeting companies with 500 to 2,000 employees, to increase participation in its 401(k) solution.
- Team Expansion: Build out the engineering, product, and operations teams to support rapid growth and innovation.
- Product Enhancement: Modernize and enhance 401(k) offerings, including improved access to alternative investments and financing options for employees.
- Scale Operations: Extend services to serve more retirement savers through both employer-sponsored 401(k) plans and individual IRA accounts, with a focus on boosting employee retention and financial wellness.
These initiatives are designed to address the stagnation in traditional retirement plans, which have seen limited upgrades in over 40 years, and align with recent policy shifts promoting alternative assets in retirement accounts.
Historical Funding and Growth
| Funding Round | Date | Amount | Lead Investors | Other Participants |
|---|---|---|---|---|
| Seed | December 2023 | Undisclosed | Company Ventures | N/A |
| Series A | August 2025 | $25 Million | Forerunner, Lux Capital | SV Angel, Box Group, Henry Kravis, HOF Capital, Inspired Capital, Westbound Equity Partners |
Basic Capital’s total funding to date stands at $25 million plus the undisclosed seed amount. Since its seed round, the company has launched its platform in May 2025, secured initial customers, and demonstrated strong growth, with clients reporting 1.5-2x increases in 401(k) participation rates.
Basic Capital’s Technology
Basic Capital’s platform is a full-stack retirement solution that integrates financing directly into 401(k)s and IRAs. For every $1 contributed by an investor, the platform provides $4 in financing, delivering 5x the investing power in diversified portfolios focused on long-term growth. Key technological features include:
- Leveraged Financing Mechanism: Utilizes private credit to amplify contributions, with cash income from investments covering financing costs and reinvesting the remainder.
- Diversified Portfolios: Allocations to corporate bonds for reliable income and broad market stocks for growth potential.
- Personalized Onboarding and Tools: Customizes investment strategies based on salary, experience, and retirement goals, with in-app advisory services.
- Compliance and Security: Record-keeping, compliance testing, and custody services handled through partnerships with SEC-registered advisers and FINRA/SIPC members.
- Alternative Investments Access: The first 401(k) platform to enable financing of assets and inclusion of alternatives, protected via LLC structures within retirement accounts to limit liability.
The platform charges employers a flat $5 per employee per month, with a 0.25% management fee on plan assets, ensuring affordability and transparency.
Industry Impact and Challenges
Basic Capital is poised to disrupt the $38 trillion U.S. retirement savings industry by introducing leverage and private credit, tools traditionally reserved for high-net-worth individuals. This could significantly boost retirement outcomes, potentially tripling wealth over time through compounded growth on a larger base. However, challenges include regulatory scrutiny, as private credit is less mature than traditional mortgages, carrying higher fees, lower liquidity, and risks of loss. Headline risks from retail investor issues and the need for education on leveraged investing pose hurdles, though recent executive orders on alternative assets in 401(k)s provide tailwinds.
Market Context and Industry Trends
The retirement market is evolving amid a private credit boom and increasing privatization of the economy, where investing solely in public markets may limit returns. Traditional 401(k)s, unchanged for decades, face criticism for low participation and insufficient growth. Trends include rising demand for alternative investments in retirement plans, supported by policy changes like President Trump’s executive order promoting alts. With Americans holding trillions in retirement assets, platforms like Basic Capital address gaps by blending fintech innovation with financial wellness, targeting mid-sized employers amid a shift toward employee retention benefits.
Stakeholder Perspectives
Investors and executives view Basic Capital as a game-changer for wealth building. Lux Capital’s Peter Hebert highlighted how federal regulations have historically limited access to wealth opportunities, praising the platform’s novel solution for financing investments over consumption. Forerunner sees the investment as a bet on rewriting the American Dream through inclusive financial tools. CEO Abdul Al-Asaad emphasized the platform’s alignment with policy shifts, calling it a “huge win for American workers” as retirement plans enter the 21st century.
Stakeholder Insights
Further insights reveal optimism tempered by realism. Al-Asaad noted the platform’s launch timing benefits from a supportive administration, though it would persist under any policy environment. Investors like Henry Kravis bring financial expertise, underscoring confidence in leveraging private capital for better after-fee returns. Customers report doubled participation rates, viewing the platform as a recruiting advantage. However, stakeholders acknowledge risks, focusing on long-term benefits like 8-15% baseline returns and protection against unleveraged stagnation.
About Basic Capital
Basic Capital is a fintech startup headquartered in New York, NY, founded by Abdul Al-Asaad in 2023. As a vertically integrated 401(k) and IRA platform, it reimagines retirement savings by embedding financing and alternative investments. The company serves employers seeking to enhance benefits for retention and employees aiming for accelerated wealth growth. With a team focused on innovation, Basic Capital combines standard 401(k) features like mutual funds and ETFs with leveraged options, all at a low-cost structure. It has quickly grown to serve dozens of employers since its May 2025 launch.
Future Outlook
Looking ahead, Basic Capital plans to expand to larger employers and individual savers, aiming to serve millions by scaling its technology and partnerships. With policy support for alternatives in retirement, the company anticipates tripling customer growth in the next year, potentially capturing a larger share of the evolving 401(k) market. Long-term, it seeks to democratize private banking tools, projecting 8-15% returns and significant wealth amplification, while navigating regulatory landscapes to ensure sustainable innovation.
Media Contact
Hunter Hopcroft
Basic Capital
hunter@basiccapital.com
