Sunny Day Fund
Helping workers to build savings and financial security
Company: Sunny Day Fund provides financial software intended to help workers build emergency and personal savings with help from their employers. The company's platform helps workers build accessible savings automatically through their employer with optional cash incentives, enabling companies to cultivate financial security and freedom in their workforce, starting with incentivized savings.
HQ Location & Year Founded: Falls Church, VA, 2019
Founder: Sid Pailla, Founder and CEO, is a socially-conscious entrepreneur, who previously served as a technology strategy consultant with Accenture, where he was named Innovator of the year, as well as a Fellow with The Global Good Fund and a Board Member at WorkLife Partnership, a non-profit that provides health and financial assistance to low income individuals in Colorado. Sid graduated from the University of Virginia with bachelor’s, master’s and PhD degrees in systems engineering, as well as an MBA from UVA’s Darden School of Business.
Funds Raised and VC Investors: $2.95 million from Avesta Capital, CAV Angels, CMFG Ventures Discovery Fund, Financial Health Network, HOPE Investment Group, Lighthouse Labs, Techstars, Temerity Capital Partners, TMV, Virginia Venture Partners
Where did the idea for Sunny Day Fund originate?
I have long believed in the importance of financial wellbeing for all. This is very personal for me as I came to the United States from India as an immigrant with my parents, who came with negative assets to their name. As a child, my parents made a combined $38,000 in income and then they got laid off from their jobs in the late ‘90s when the market crashed. I could see that there was a broken system that was causing trauma in so many people’s lives. I went to the University of Virginia to study systems engineering, but I had a keen interest in behavioral economics. As I continued my studies in the MBA program, I realized that it was ok to talk openly about my financial background. This led me to thinking about how employers often sponsor 401(K) retirement plans, but made me wonder why they did not offer basic savings plans that were fully liquid and available to those who were lower on the economic ladder.
What is the key problem that Sunny Day Fund intends to solve?
We help working families save money for rainy day expenses directly from the paycheck. Our platform provides employers the opportunity to incentivize savings through financial contributions and an educational toolkit. In turn, employers will be able to help retain their staff and offer them a path toward sound personal financial management.
How are you most differentiated as a service?
Our platform is driven by behavioral economics. We offer several important levers to help encourage workers to save money by applying data analytics to user experience and leveraging incentives that will have a real impact. We feel this must be working as we have 50% employee engagement among the companies that we serve, compared to single-digit percentage engagement for basic financial literacy platforms that some organizations provide.
What are the company’s key accomplishments to date?
Sunny Day Fund’s clients come particularly from mid-market organizations and in sectors like manufacturing and healthcare, which often have sub six-figure wages. We are servicing over 30 organizations today, covering small and medium-size companies and nonprofits, California Closets and Hart House to name a couple who have shared our offering publicly. We cover manufacturing, healthcare, restaurants, auto services, and more. Two-thirds of the employees earn less than $80,000 per year. The average employee who uses Sunny Day Fund has put aside $1,700 thus far. Early results include:
~50% voluntary participation
~$1,700 in annualized savings
Up to 25% higher employee retention
Fewer 401(k) loans and early withdrawals
It is also with great pride that our team here is 79% BIPOC. We were also named to the “Inclusive Fintech 50” by ACCION and the Center for Financial Inclusion.
What lies ahead in the plans for Sunny Day Fund?
Emergency savings is the #1 financial resolution for 2023 and now a market expectation with the passage of Secure Act 2.0. That’s why Sunny Day Fund has developed an award-winning workplace emergency savings program for people-centric businesses. By automating and rewarding employees' savings behavior, SDF drives financial health and retention while preserving retirement assets against emergencies. We are aiming to grow from serving primarily mid-market to adding 2-3 large enterprises this year. We plan to scale up to greatly increase the impact that we hope to have with workers across the country.
It is easy for those of us who are among the privileged to lose sight of the fact that 63% of Americans live paycheck to paycheck. In many other countries, that number is far greater. Turning this around will not be easy and will take a collective effort of governments, nonprofits and corporations who decide that it is a priority to elevate families who are not able to earn enough money to save for future needs. Sunny Day Fund is one piece of this puzzle. Through a mix of education, financial incentives, and a great user experience, bit by bit, employers and employees can start to meaningfully chip away at this dire problem. Candidly, there is no one in society who loses, when those of lower income levels, can actually break out of poverty and begin to breathe and thrive without always being burdened by a lack of financial security.