In April, retirement fintech firm Smart rolled into its new U.S. headquarters inside Cummins Station.
Today, with a fresh $228 million investment from U.K.-based Chrysalis Investments, Smart’s next stop could be Wall Street.
“We’re at a very interesting part of our lifecycle at Smart. We weren’t a traditional private equity candidate,” Smart U.S. CEO Jodan Ledford said. “Chrysalis is a late-stage private equity fund. … Where they invest in private companies who are probably within the next three, four or five years a candidate to go public, which I think, obviously, is in line with our ambitions.”
Smart announced the $228 million investment last week led by Chrysalis with additional investors to be announced.
While Smart is based in the U.K., the firm chose Nashville as its U.S. headquarters last year. This week, the company announced it would invest $2.2 million in its Nashville operations, committing to create 128 new job over the next five years.
It’s not immediately clear what, if any, incentives the state of Tennessee will provide Smart to set up its headquarters in Davidson County.
The company currently has 25 U.S. employees, Ledford said, with expectations for that number to grow to 50 by the end of this year and 75 by the end of 2022.
Headquarters are especially prized economic development wins because such jobs typically feature higher pay, and they inject a company’s decision-makers into the market, which can impact everything from real estate purchases to philanthropy to support for public schools.
The economic value could be increased even higher if Smart becomes a public company in coming years. Smart would likely be the first locally headquartered fintech to go public in Nashville’s history and would be the first tech-centric startup to go public in Music City since SmileDirectClub in 2019 — a potential big win for Nashville’s growing tech industry.
However because Smart is based in the U.K., Ledford said it’s not yet clear if Smart would be traded on a U.S. market or in Britain.
“Ultimately, this is a big raise,” Ledford said. “It’s a signal that there’s a lot of interest in the space. … When you think about some of the policy initiatives going on in addition to what’s already happened, there’s an opportunity for an upgrade.”
“The dynamic of the U.S. [retirement] market being five times greater than the global market, there’s a chance that in five years time the U.S. business, just by sheer size of the U.S. market, could be the dominant size of the business overall. That would probably weigh heavily on that decision,” Ledford said. “It’s unclear but it’s fundamentally not out of the question that we’d list in the U.S.”
Ledford said that decision would take input from Chrysalis, who he said has taken companies public in the U.S. and the U.K. and can guide Smart through the process.
Chrysalis is listed on the London Stock Exchange, with more than $10.5 billion of assets under management.
In the meantime, Ledford said Smart U.S. is focused on building its U.S. platforms, to which a portion of Chrysalis’ investment will be dedicated. The first platform — which Ledford calls the company’s “core” record keeping platform — will work with 401K plans, while the other platform is a retirement income technology tool focused on financial wellness.
He said both platforms are expected to be live in 2022, at which time Smart will begin taking clients in the U.S.
Smart has more than 70,000 retirement plans on its platform throughout the U.K., Ireland, Dubai and Australia, with more than $2.4 billion in assets on its platform. Founded in 2014, the company is expanding to the U.S. in conjunction with the roll out of the SECURE Act, which expands small business owners’ abilities to set up retirement plans and makes many part-time workers eligible for plans.
