Captain401, a technology company based in San Francisco, closed a $3.5 million seed round of financing this week, furthering its aim to give small businesses an easy, automated way to set up and maintain a 401(k) plan.

“I think we are getting recognition from investors that what we’re doing to automate not only the method of investing for employees but also automating the HR administration for companies inside their 401(k) is really, really valuable and an enormous opportunity in an industry that hasn’t had much technology innovation over the past couple of decades,” says Roger Lee, co-founder and CEO of Captain401.

Companies can use Captain401 to set up a 401(k) plan completely online. Ongoing administration is automated and pulls data from other HR software platforms such as Zenefits, Gusto and Intuit, eliminating repetitive data entry. Employees, meanwhile, benefit from automated investment management services and a simple user interface, according to the company, which uses index funds from companies such as Vanguard as the basis for its investment portfolios.

“Running a 401(k) benefit and administering one for your company – whether you’re large or small – carries a fair amount of administrative burden and time investment,” says Lee. “We’ve been able to use technology to automate a lot of that work to really save employers time and a half.”

Captain401 has gained traction among tech companies, counting TinyCo, Buffer, Heap, Joyable and Y Combinator as customers.

Changing small-employer perceptions about 401(k) plan administration is a big challenge, says Shin Inoue, founder and CEO of ForUsAll, another tech company based in San Francisco that aims to make 401(k) plan set-up and administration simple for small employers.

“Communicating that it’s no longer that difficult, that it’s hardly any work to administer a 401(k), and it doesn’t cost a lot anymore [is a challenge],” he says. “Our pricing, for example, is comparable to something that you’d see with a Fortune 500 company’s 401(k).”

Employers using ForUsAll pay $94/month for up to 10 participating employees, plus an additional $5 per additional employee/month, which goes down to $3 when 40 or more employees are participating in the 401(k) plan. Recordkeeping services are provided by a third-party recordkeeper and are included in the fees.

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