Henry Yoshida has a vision to allow average investors to unlock savings from their IRA retirement accounts to invest in cryptocurrency, real estate and other investments that promise higher returns than traditional stocks, bonds and mutual funds — but with all the tax advantages of an IRA.
The concept is not entirely new — ultra-wealthy investors like Peter Thiel have used IRAs as a venture capital fund for years — but Yoshida, the CEO and co-founder of Austin-based Rocket Dollar, wants to open up the same world of possibilities to the average investor.
Rocket Dollar already boasts more than $400 million in customer assets invested across a mix of cryptocurrency, real estate, startup ventures and other investments, according to the company.
Yoshida hopes to build on that momentum with an additional $8 million in Series A funding, which was announced Thursday.
“We think of ourselves as the picks-and-shovels company that sits at the intersection of this gigantic $12.6 trillion pool of capital (in IRAs) that is basically 99.7 percent locked up in regular stocks, bonds and mutual funds and in between people’s growing interest in private alternative investments, whether that’s crypto, real estate or a platform investing in a startup venture,” he told Built In.
Rocket Dollar currently employs 18 people, all but one of whom live in Austin. With the additional funding, Yoshida plans to increase headcount to 25 by the end of 2021 and 45 by the end of 2022.
Yoshida also plans to use the additional capital to accelerate product development, double down on cybersecurity and expand investment education to ensure investors of all ages and sophistication feel empowered when investing through Rocket Dollar.
Yoshida has specialized in 401(k) and IRA retirement accounts for 20 years, including 10 years at Merrill Lynch, running a management consultant company and launching Honest Dollar, another fintech platform, which was acquired in 2016.
“After studying this industry for years, we have applied new technology to a paper-driven complex industry that instantly makes investing in alternatives accessible and affordable,” Yoshida said. “This gives control back to clients and opens a wider range of asset classes to savvy investors, without the need for expensive service providers.”
The funding round was led by Park West Asset Management with participation from Hyphen Capital, Moneta Venture Capital, Kraken Ventures and Primetime Partners, which is co-founded by Alan Patricof, the founder and managing director of Greycroft. Existing investor Sure Ventures also participated. Additionally, former T. Rowe Price Global Investment Services CEO and President Todd Ruppert will join Rocket Dollar’s board.
