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Homebase raises $71M for a team management platform aimed at SMBs and their hourly workers
Small and medium enterprises have become a big opportunity in the world of B2B technology in the last several years, and today a startup that’s building tools aimed at helping them manage their teams of workers is announcing some funding that underscores the state of that market.
Homebase, which provides a platform that helps SMBs manage various services related to their hourly workforces, has closed $71 million in funding, a Series C that values the company between $500 million and $600 million, according to sources close to the startup.
The round has a number of big names in it that are as much a sign of how large VCs are valuing the SMB market right now as it is of the strategic interest of the individuals who are participating. GGV Capital is leading the round, with past backers Bain Capital Ventures, Baseline Ventures, Bedrock, Cowboy Ventures and Khosla Ventures also participating. Individuals include Focus Brands President Kat Cole; Jocelyn Mangan, a board member at Papa John’s and Chownow and former COO of Snag; former CFO of payroll and benefits company Gusto, Mike Dinsdale; Guild Education founder Rachel Carlson; star athletes Jrue and Lauren Holiday; and alright alright alright actor and famous everyman and future political candidate Matthew McConaughey.
Homebase has raised $108 million to date.
The funding is coming on the heels of strong growth for Homebase (which is not to be confused with the U.K./Irish home improvement chain of the same name, nor the YC-backed Vietnamese proptech startup).
The company now has some 100,000 small businesses, with 1 million employees in total, on its platform. Businesses use Homebase to manage all manner of activities related to workers that are paid hourly, including (most recently) payroll, as well as shift scheduling, timeclocks and timesheets, hiring and onboarding, communication and HR compliance.
John Waldmann, Homebase’s founder and CEO, said the funding will go toward both continuing to bring on more customers as well as expanding the list of services offered to them, which could include more features geared to frontline and service workers, as well as features for small businesses who might also have some “desk” workers who might still work hourly.
The common thread, Waldmann said, is not the exact nature of those jobs, but the fact that all of them, partly because of that hourly aspect, have been largely underserved by tech up to now.
“From the beginning, our mission was to help local businesses and their teams,” he said. Part of his inspiration came from people he knew: a childhood friend who owned an independent, expanding restaurant chain, and was going through the challenges of managing his teams there, carrying out most of his work on paper; and his sister, who worked in hospitality, which didn’t look all that different from his restaurant friend’s challenges. She had to call in to see when she was working, writing her hours in a notebook to make sure she got paid accurately.
“There are a lot of tech companies focused on making work easier for folks that sit at computers or desks, but are building tools for these others,” Waldmann said. “In the world of work, the experience just looks different with technology.”
Homebase currently is focused on the North American market — there are some 5 million small businesses in the U.S. alone, and so there is a lot of opportunity there. The huge pressure that many have experienced in the last 16 months of COVID-19 living, leading some to shut down altogether, has also focused them on how to manage and carry out work much more efficiently and in a more organized way, ensuring you know where your staff is and that your staff knows what it should be doing at all times.
What will be interesting is to see what kinds of services Homebase adds to its platform over time: In a way, it’s a sign of how hourly wage workers are becoming a more sophisticated and salient aspect of the workforce, with their own unique demands. Payroll, which is now live in 27 states, also comes with pay advances, opening the door to other kinds of financial services for Homebase, for example.
“Small businesses are the lifeblood of the American economy, with more than 60% of Americans employed by one of our 30 million small businesses. In a post-pandemic world, technology has never been more important to businesses of all sizes, including SMBs,” Jeff Richards, managing partner at GGV Capital and new Homebase board member, said in a statement. “The team at Homebase has worked tirelessly for years to bring technology to SMBs in a way that helps drive increased profitability, better hiring and growth. We’re thrilled to see Homebase playing such an important role in America’s small business recovery and thrilled to be part of the mission going forward.”
It’s interesting to see McConaughey involved in this round, given that he’s most recently made a turn toward politics, with plans to run for governor of Texas in 2022.
“Hardworking people who work in and run restaurants and local businesses are important to all of us,” he said in a statement. “They play an important role in giving our cities a sense of livelihood, identity and community. This is why I’ve invested in Homebase. Homebase brings small business operations into the modern age and helps folks across the country not only continue to work harder, but work smarter.”
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Dear Sophie: Should we sponsor international hires for H-1B transfers and green cards?
Here’s another edition of “Dear Sophie,” the advice column that answers immigration-related questions about working at technology companies.
“Your questions are vital to the spread of knowledge that allows people all over the world to rise above borders and pursue their dreams,” says Sophie Alcorn, a Silicon Valley immigration attorney. “Whether you’re in people ops, a founder or seeking a job in Silicon Valley, I would love to answer your questions in my next column.”
Extra Crunch members receive access to weekly “Dear Sophie” columns; use promo code ALCORN to purchase a one- or two-year subscription for 50% off.
Dear Sophie,
My startup is desperately recruiting, and we see a lot of engineering candidates on H-1Bs. They’re looking for H-1B transfers and green cards. What should we do?
— Baffled in the Bay Area
Dear Baffled,
Yes, you should absolutely sponsor international talent for green cards! Listen to my podcast in which I discuss how to hire international professionals who are already in the United States by transferring their H-1B visa and using green cards as a benefit to attract and retain them.
The severe shortage of tech talent currently in the U.S. is prompting professionals to negotiate better compensation packages, and companies are increasingly using green card sponsorship as a benefit to attract and retain international talent.
Green card sponsorship as a benefit
Companies need to offer green card sponsorship to remain competitive. In fact, Envoy’s 2021 Immigration Trends Report found that 74% of employers said they have sponsored an individual for permanent residence (a green card), which is the highest percentage in the six years Envoy has asked this question in its annual survey. Rather than waiting until the last possible moment to sponsor an H-1B visa holder for a green card, 58% of employers say they are starting the process with the employee’s first year at the company on an H-1B visa. Most employers — 96% — said that sourcing international talent is important to their company’s talent acquisition strategy.
Image Credits: Joanna Buniak / Sophie Alcorn (opens in a new window)
Sponsoring international talent for a green card is a way for companies to show they invest in and prioritize their employees and are willing to make a long-term commitment to a prospective employee. Employers can further distinguish themselves by offering to cover expenses for green card applications for a spouse and children, as well as a work permit application for a spouse.
Employers should also consider paying for an employee’s marriage-based green card as a third-party payor, particularly since marriage-based green cards take about one-third of the time and one-third of the investment compared to employment-based green cards. What’s more, most marriage-based green cards are not subject to annual quotas.
H-1B transfers are most common right now
Because most U.S. embassies and consulates abroad remain closed for routine visa processing due to COVID-19, most employers are hiring international talent who are already in the United States on an H-1B sponsored by another employer. In these situations, an employer must file for an H-1B transfer for the prospective employee. Take a look at a previous Dear Sophie column for more details on the H-1B transfer process.
The questions that employers ask me most often about the H-1B transfer process include:
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Dear Sophie: Should we look to Canada to retain international talent?
Here’s another edition of “Dear Sophie,” the advice column that answers immigration-related questions about working at technology companies.
“Your questions are vital to the spread of knowledge that allows people all over the world to rise above borders and pursue their dreams,” says Sophie Alcorn, a Silicon Valley immigration attorney. “Whether you’re in people ops, a founder or seeking a job in Silicon Valley, I would love to answer your questions in my next column.”
Extra Crunch members receive access to weekly “Dear Sophie” columns; use promo code ALCORN to purchase a one- or two-year subscription for 50% off.
Dear Sophie,
I handle people ops as a consultant at several different tech startups. Many have employees on OPT or STEM OPT who didn’t get selected in this year’s H-1B lottery.
The companies want to retain these individuals, but they’re running out of options. Some companies will try again in next year’s H-1B lottery, even though they face long odds, particularly if the H-1B lottery becomes a wage-based selection process next year.
Others are looking into O-1A visas, but find that many employees don’t yet have the experience to meet the qualifications. Should we look at Canada?
— Specialist in Silicon Valley
Dear Specialist,
That’s what we’re all about — finding creative immigration solutions to help U.S. employers attract and retain international talent and help international talent reach their dreams of living and working in the United States.
I’ve written a lot on how U.S. tech startups can keep their international team members in the United States. One strategy is to help the startup employees become qualified for O-1As. Another is to obtain unlimited H-1B visas without the lottery through nonprofit programs affiliated with universities. Sometimes candidates return to school for master’s degrees that offer a work option called CPT, or curricular practical training.
Image Credits: Joanna Buniak / Sophie Alcorn (opens in a new window)
But sometimes, companies end up deciding to move some of their international talent to Canada to work remotely. Recently, Marc Pavlopoulos and I discussed how to help U.S. employers and international talent on my podcast. Through his two companies, Syndesus and Path to Canada, Pavlopoulos helps both U.S. tech employers and international tech talent when their employees or they themselves run out of immigration options in the United States. He most often assists U.S. tech employers when their current or prospective employees are not selected in the H-1B lottery.
Through Syndesus, a Canada-based remote employer — also known as a professional employment organization (PEO) — Pavlopoulos helps U.S. employers retain international tech workers who either no longer have visa or green card options that will enable them to remain in the United States or those who were born in India and are fed up by the decades-long wait for a U.S. green card. U.S. employers that don’t have an office in Canada can relocate these workers to Canada with the help of Syndesus, which employs these tech workers on behalf of the U.S. company, sponsoring them for a Canadian Global Talent Stream work visa.
Syndesus also helps U.S. tech startups without a presence in Canada find Canadian tech workers and employ them on the startup’s behalf. As an employer of record, Syndesus handles payroll, HR, healthcare, stock options and any issues related to Canadian employment law.
Pavlopoulos’ other company, Path to Canada, currently focuses on connecting international engineers and other tech talent working in the U.S. — including those whose OPT or STEM OPT has run out — who cannot remain in the U.S. find employment in Canada, either at a Canadian company or at the Canadian office of a U.S. company. These employees get a Global Talent Stream work visa and eventually permanent residence in Canada. Pavlopoulos intends to expand Path to Canada to help tech talent from around the world live and work in Canada.
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Here are 3 things you should do with your stock options
There’s a reason startup compensation packages usually include equity, or stock options. For one, it’s a way for startups to remain competitive in the job market and attract top talent. But it’s also a way to reward those employees who join early and give them a tangible reason to stay incentivized to grow the company.
The problem is that while many employees do understand that their equity compensation could mean a big payday in the future — and, in 2021, that’s more likely than ever — they don’t often understand the inevitable complexities of their stock options. That puts employees at risk of not getting the most value after an IPO or, worse, losing them.
If you’ve ever been confused about your equity, or haven’t thought much about it, you’re not alone. That’s why I’m going to share three things all employees joining a startup should do with their equity:
Understand how to value your equity — and when it can change
While many startups are getting better at proactively communicating the value of your equity package upfront, some are still figuring out the best way to do it. That’s because, unlike the more straightforward number of a salary, stock options are more nuanced — they’re a living, breathing type of compensation.
The most important pieces of information to pay attention to are your 409A valuation, your strike price, the type of options you were granted and the preferred share price.
The 409A valuation is based on your company’s valuation. This is also referred to as the fair market value (FMV). The 409A valuation can, and does, often change — they have to be updated at least once a year by a third-party valuator in order to meet tax rules. The 409A also changes during a fundraising event. Investors involved in the funding round determine how they value the company and are given options, at that valuation, in exchange for cash.
The most important pieces of information to pay attention to are your 409A valuation, your strike price, the type of options you were granted and the preferred share price.
Since the company has now been valued higher, the 409A changes for everyone. It’s also possible for the 409A to go down if, for any reason, the company is now valued at a lower amount. This is known as a “down round.” Airbnb had a notable down round during the pandemic, though it eventually recovered and went public.
Your strike price is the price at which you can buy your stock options (also known as exercising). Yes, buy. You are given the option to buy them, which is why they are called stock options. But know that your strike price will likely never change. However, if you’re ever given more stock options (perhaps as a future bonus), this would be a separate grant and the strike price could be different. Companies are legally required to issue stock options at the most recent 409A price (or higher).
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Remote raises $150M on a $1B+ valuation to manage payroll and more for organizations’ global workforces
For many of us, going to work these days no longer means going into a specific office like it used to; and today one of the startups that’s built a platform to help cater to that new, bigger world of employment — wherever talent might be — is announcing a major round of funding on the back of strong demand for its tools.
Remote, which provides tools to manage onboarding, payroll, benefits and other services for tech and other knowledge workers located in remote countries — be they contractors or full-time employees — has raised $150 million. Job van der Voort, the Dutch-based CEO and co-founder of New York-based Remote, confirmed in an interview that funding values Remote at over $1 billion.
Accel is leading this Series B, with participation also from previous investors Sequoia, Index Ventures, Two Sigma, General Catalyst and Day One Ventures.
The funding will be used in a couple of areas. First and foremost, it will go toward expanding its business to more markets. The startup has been built from the ground up in a fully integrated way, and in contrast to a number of others that it competes with in providing Employer of Record services, Remote fully owns all of its infrastructure. It now provides its HR services, as fully operational legal entities, for 50 countries (it has a target of growing that to 80 by the end of this year). The platform is also set to be enhanced with more tools around areas like benefits, equity incentive planning, visa and immigration support and employee relocation.
“We are doubling down on our approach,” van der Voort said. “We try to fully own the entire stack: entity, operations, experts in house, payroll, benefits and visa and immigration — all of the items that come up most often. We want to to build infrastructure products, foundational products because those have a higher level of quality and ultimately a lower price.”
In addition, Remote will be using the funding to continue building more tools and partnerships to integrate with other providers of services in what is a very fragmented human resources market. Two of these are being announced today to coincide with the funding news: Remote has launched a Global Employee API that HR platforms that focus on domestic payroll can integrate to provide their own international offering powered by Remote. HR platform Rippling (Parker Conrad’s latest act) is one of its first customers. And Remote is also getting cosier with other parts of the HR chain of services: applicant tracking system Greenhouse is now integrating with it to help with the onboarding process for new hires.
Indeed, $150 million at a $1 billion+ valuation is a very, very sizable Series B, even by today’s flush-market standards, but it comes after a bumper year for the company, and in particular since November last year when it raised a Series A of $35 million. In the last nine months, customer numbers have grown seven-fold, with users on the platform increasing 10 times. Most interestingly, perhaps, is that Remote’s revenues — its packages start at $149 per month but go up from there — have increased by a much bigger amount: 65x, the company said. That basically points to the fact that engagement from those users — how much they are leaning on Remote’s tech — has skyrocketed.
Although there are a lot of competitors in the same space as Remote — they include a number of more local players alongside a pretty big range of startups like Oyster (which announced $50 million in funding in June), Deel, which is now valued at $1.25 billion; Turing; Papaya Global (now also valued at over $1 billion); and many more — the opportunity they are collectively tackling is a massive one that, if anything, appears to be growing.
Hiring internationally has always been a costly, time-consuming and organizationally challenged endeavor, so much so that many companies have opted not to do it at all, or to reserve it for very unique cases. That paradigm has drastically shifted in recent years, however.
Even before COVID-19 hit, there was a shortage of talent, resulting in a competitive struggle for good people, in companies’ home markets, which encouraged companies to look further afield when hiring. Then, once looking further afield, those employers had to give consideration to employing those people remotely — that is, letting them work from afar — because the process of relocating them had also become more expensive and harder to work through.
Then COVID-19 happened, and everyone, including people working in a company’s HQ, started to work remotely, changing the goalposts yet again on what is expected by workers, and what organizations are willing to consider when bringing on a new person, or managing someone it already knows, just from a much farther distance.
While a lot of that has played out in the idea of relocating to different cities in the same country — Miami and Austin getting a big wave of Silicon Valley “expats” being two examples of that — it seems just a short leap to consider that now that sourcing and managing is taking on a much more international slant. A lot of new hires, as well as existing employees who are possibly not from the U.S. to begin with, or simply want to see another part of the world, are now also a part of the mix. That is where companies like Remote are coming in and lowering the barriers to entry by making it as easy to hire and manage a person abroad as it is in your own city.
“Remote is at the center of a profound shift in the way that companies hire,” said Miles Clements, a partner at Accel, in a statement. “Their new Global Employee API opens up access to Remote’s robust global employment infrastructure and knowledge map, and will help any HR provider expand internationally at a speed impossible before. Remote’s future vision as a financial services provider will consolidate complicated processes into one trusted platform, and we’re excited to partner with the global leader in the quickly emerging category of remote work.”
And it’s interesting to see it now partnering with the likes of Rippling. It was a no-brainer that as the latter company matured and grew, it would have to consider how to handle the international component. Using an API from Remote is an example of how the model that has played out in communications (led by companies like Twilio and Sinch) and fintech (hello, Stripe) also has an analogue in HR, with Remote taking the charge on that.
And to be clear, for now Remote has no plans to build a product that it would sell directly to individuals.
“Individuals are reaching out to us, saying, ‘I found this job and can you help me and make sure I get paid?’ That’s been interesting,” van der Voort said. “We thought about [building a product for them] but we have so much to do with employers first.” One thing that’s heartening in Remote’s approach is that it wouldn’t want to provide this service unless it could completely follow through on it, which in the case of an individual would mean “vetting every major employer,” he said, which is too big a task for it right now.
In the meantime, Remote itself has walked the walk when it comes to remote working. Originally co-founded by two European transplants to San Francisco, the pair had firsthand experience of the paradoxical pains and opportunities of being in an organization that uses remote workforces.
Van der Voort had been the VP of product for GitLab, which he scaled from five to 450 employees working remotely (it’s now a customer of Remote’s); and before co-founding Remote, CTO Marcelo Lebre had been VP of engineering for Unbabel — another startup focused on reducing international barriers, this time between how companies and global customers communicate.
Today, not only is the CEO based out of Amsterdam in The Netherlands, with the CTO in Lisbon, Portugal, but New York-based Remote itself has grown to 220 from 50 employees, and this wider group has also been working remotely across 47 countries since November 2020.
“The world is looking very different today,” van der Voort said. “The biggest change for us has been the size of the organization. We’ve gone from 50 to more than 200 employees, and I haven’t met any of them! We have tried to follow our values of bringing opportunity everywhere so we hire everywhere as we solve that for our customers, too.”
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Before an exit, founders must get their employment law ducks in a row
Successfully selling a business has much to do with timing. For many entrepreneurs, it’s the high-stakes end game where they cash out and reap the rewards of their efforts. At a certain point, when both buyers and sellers are working hard to close the deal, negotiations can move very quickly. If you’re the seller, this is not the time to discover unanticipated problems in your business.
Distressingly often, these problems are related to employment. Inattention to employment issues can have a significant impact on deals — from preventing closings and reducing the deal value to altering the deal terms or significantly limiting the pool of potential buyers.
Poor compliance, lack of policies or flawed practices mean potential liability exposure or expensive policy revisions and employee retraining — all of which can devalue your business.
Fortunately, such issues typically can be resolved well in advance with a little forethought and legal guidance. It’s important to get your employment ducks in a row long before you start planning your exit.
What follows is an overview of the three main categories of employment issues that can derail or delay a sale. For the most part, these assume an asset sale, but may vary in the case of a stock sale.
Compliance
By far the most significant problem is general employment law compliance. This means creating strong employment policies and practices that are documented, in place and operating long before you pursue a deal. The key area is wage and hour issues — timekeeping and payroll practices, worker classification issues (employee vs. independent contractor; exempt vs. non-exempt), meal and rest periods, PTO policies and payouts at termination.
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Beamery raises $138M at an $800M valuation for its ‘operating system for recruitment’
Online job listings were one of the first things to catch on in the first generation of the internet. But that has, ironically, also meant that some of the most-used digital recruitment services around today are also some of the least evolved in terms of tapping into all of the developments that tech has to offer, leaving the door open for some disruption. Today, one of the startups doing just that is announcing a big round of funding to double down on its growth so far.
Beamery, which has built what it describes as a “talent operating system” — a way to manage sourcing, hiring and retaining of people, plus analyzing the bigger talent picture for an organization, a “talent graph” as Beamery calls it, in an all-in-one, end-to-end service — has raised $138 million, money that it plans to use to continue building out more technology, as well as growing its business, which has been expanding quickly and saw 337% revenue growth year over year in Q4.
The Ontario Teachers’ Pension Plan Board (Ontario Teachers’), a prolific tech investor, is leading the round by way of its Teachers’ Innovation Platform (TIP). Other participants in this Series C include several strategic backers who are also using Beamery: Accenture Ventures, EQT Ventures, Index Ventures, M12 (Microsoft’s venture arm) and Workday Ventures (the venture arm of the HR software giant).
Abakar Saidov, co-founder and CEO at London-based Beamery, told TechCrunch in an interview that it is not disclosing valuation, but sources in the know say it’s in the region of $800 million.
The round is coming on the heels of a very strong year for the company.
The “normal” way of doing things in the working world was massively upended with the rise of COVID-19 in early 2020, and within that, recruitment was among one of the most impacted areas. Not only were people applying and interviewing for jobs completely remotely, but in many cases they were getting hired, onboarded and engaged into new jobs without a single face-to-face interaction with a recruiter, manager or colleague.
And that’s before you consider the new set of constraints that HR teams were under in many places: variously, we saw hiring freezes, furloughs, layoffs and budget cuts (often more than one of these per business), and yet work still needed to get done.
All that really paved the way for platforms like Beamery’s — designed not only to be remote-friendly software-as-a-service running in the cloud, but to handle the whole recruiting and talent management process from a single place — to pick up new customers and prove its role as an updated, more user-friendly approach to the task of sourcing and placing talent.
“Traditional HR is very admin-heavy, and when you add in payroll and benefits, the systems that exist are very siloed,” said Saidov in the interview. “The innovation for us has been to move out of that construct and into something that is human, and has a human touch. From a data perspective, we’re creating the underlying system of record for all of the people touching a business. So when you build on top of that, everything looks like a consumer application.”
In the last 12 months, the company said that customers — which are in the area of large enterprises and include COVID vaccine maker AstraZeneca, Autodesk, Nasdaq, several major tech giants and strategic investor Workday — filled 1 million roles through its platform, a figure that includes not just sourcing and placing candidates from outside of an organization’s walls, but also filling roles internally.
The work that Beamery is doing is definitely helping the business not just pull its weight — its last round was a much more modest $28 million, which was raised way back in 2018 — but grow and invest in new services.
The company said it had a year-on-year increase of 462% in jobs posted across its customer base. A year before that (which would have extended into pre-pandemic 2019), the number of candidates pipelined increased by a mere 46%, pointing to acceleration.
Beamery today already offers a pretty wide range of different services.
They include tools to source candidates. This can be done organically by creating your own job boards to be found by anyone curious enough to look, and by leveraging other job boards on other platforms like LinkedIn, the Microsoft-owned professional networking platform that counts “Talent Solutions” — i.e. recruitment — as one of its primary business lines. (Recall Microsoft is one of Beamery’s backers.) It also provides tools to create and manage online recruitment events.
Beamery also offers tools to help people get the word out about a role, with a service akin to programmatic advertising (similar to ZipRecruiter) to populate other job boards, or run more targeted executive recruitment searches. It also provides a way for HR teams to create internal recruitment processes, and also run surveys with existing teams to get a better picture of the state of play.
And it has some analytics tools in place to measure how well recruitment drives, retention and other metrics are evolving to help plan what to do in the future.
The big question for me now is how and if Beamery will bring more into that universe. There have been some interesting startups emerging in the wider world of talent IT (if we could call it that) that could be interesting complements to what Beamery already has, or provide a roadmap for what it might try to build itself.
It includes much more extensive work on internal job boards (such as what Gloat has built); digging much deeper into building accurate pictures of who is at the company and what they do (see: ChartHop); or the many services that are building ways of sourcing and connecting with contractors, which are a huge, and growing, part of the talent equation for companies (see: Turing, Remote, Deel, Papaya Global, Lattice, Factorial and many others).
Beamery already includes contractors alongside full- and part-time roles that can be filled using its platform, but when it comes to managing those contractors, that’s something that Beamery does not do itself, so that could be one area where it might grow, too.
“The key reason enterprises work with us it to consolidate a bunch of workflows,” Saidov said. “HR hates having different systems and everything becomes easier when things interoperate well.” Employing contractors typically involves three elements: sourcing, management and scheduling, so Beamery will likely approach how it grows in that area by determining which piece might be “super core” the centralization of more data, he added.
Another two likely areas he hinted are on Beamery’s roadmap are assessments — that is, providing tools to recruiters who want to measure the skills of applicants for jobs (another startup-heavy area today) — and tools to help recruiters do their jobs better, whether that involves more native communications tools in video and messaging, as well as Gong-like coaching to help them measure and improve screening and interviewing.
It might also consider developing a version for smaller businesses to use.
Questions investors are happy to see considered, it seems, as they invest in what looks like a winner in the bigger race. TIP’s other investments have included ComplyAdvantage, Epic Games, Graphcore, KRY and SpaceX, a long run in a wide field.
“Leading companies worldwide are prioritising recruitment and retention. They are turning to Beamery for a best-in-class talent solution that can be seamlessly integrated with their business,” said Maggie Fanari, MD for TIP in Emea. “Beamery’s best-in-class approach is already recognized by top-tier companies. I’m excited by the company’s vision of to use technology to support long-term talent growth and build better businesses. Beamery is the first company to bring predictive marketing and data science into recruitment. They are a truly innovative company, building a vision that can shape the future of work — the company fits all the criteria we look for in a TIP investment and more.”
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Freelancer marketplace Toptal sues Andela and ex-employees, alleging theft of trade secrets
The war for talent in the tech world can be brutal — and so, it turns out, can the war between platforms that help companies source it. In the latest developement, Toptal — a marketplace for filling engineering and other tech roles with freelance, remote workers — has filed a lawsuit against direct competitor Andela and several of its employees, alleging the theft of trade secrets in pursuit of “a perfect clone of its business”, according to the complaint. All of the Andela employees previously worked at Toptal.
Toptal’s lawsuit, filed in the Supreme Court of the State of New York and embedded below, alleges that the employees reneged on confidentiality, non-solicitation and non-compete agreements with Toptal. Toptal also alleges interference with contract, unfair competition and misappropriation of trade secrets.
While both Toptal and Andela have built businesses around the idea of remote freelancers filling tech jobs — a concept that has increased in profile and acceptance as people shifted to remote work during the pandemic — the pair only emerged as very direct competitors in the last year or so.
Toptal was co-founded by CEO Taso Du Val in 2010, and since then it has grown to become one of the world’s most popular on-demand talent networks. The company matches skilled tech personnel like engineers, software developers, designers, finance experts and product managers to clients across the globe. According to company data, it currently serves over 1,000 clients in more than 10 countries.
Andela, on the other hand, only recently turned to using a similar approach. Founded in 2014 in Lagos, Andela’s original business model was based on building physical hubs to source, vet, train and house talent across the continent. It did this in Kenya, Nigeria, Rwanda and Uganda.
However, Andela struggled with scaling and operating that business model, and in 2019 it laid off 400 developers. Early last year as the pandemic took hold, it laid off a further 135 employees. However this time around it did so with a strategy pivot in mind: after testing satellite models in Egypt and Ghana, the talent company decided to go forego physical hubs completely and go remote, first across Africa in 2020 and globally this year.
“We thought, ‘What if we accelerated [the African remote network] and just enabled applicants from anywhere?’ Because it was always the plan to become a global company. That was clear, but the timing was the question,” Andela CEO Jeremy Johnson told TechCrunch in April.
Yet Toptal believes Andela’s choice to scrap its hubs and source remote talent from everywhere was specifically to replicate Toptal’s business model — and success.
“Until recently, Andela operated an outsourcing operation focused on in-person, on-site hubs in Africa,” Toptal notes in the complaint. “Over the course of the past year, Andela has moved away from its prior focus on in-person hubs situated in Africa and is engaging in a barely disguised attempt to become a clone of Toptal.”
Toptal claims that for Andela to pull off a “perfect clone of its business,” it poached key Toptal employees to exploit their knowledge, and that the ex-employees knowingly breached their confidentiality and non-solicitation obligations to Toptal.
Companies often try to uncover each other’s trade secrets by poaching, and many blatantly copy a competitor and do so without repercussions. On top of this, these two are hardly the only two places to for tech talent to connect with remote freelance job opportunities. Others include Fiverr, Malt, Freelancer.com, LinkedIn, Turing, Upwork and many more.
In a global economy with an estimated 1 billion so-called knowledge workers, and with freelancers accounting for some 35% of the world’s workforce, it’s a pretty gigantic market, which you could alternately look at as a major opportunity, but also a ripe field for many players with multiple permutations of the marketplace concept.
So why is Toptal crying foul play? The company says its ex-employees have not only revealed Toptal’s trade secrets and confidential information to compete unfairly but are also poaching additional Toptal personnel, clients and the talent that Toptal matches and sources to clients.
The ex-employees cited by Toptal include Sachin Bhagwata, vice president of enterprise; Martin Chikilian, head of talent operations; Courtney Machi, vice president of product; and Alvaro Oliveira, executive vice president of talent operations. Toptal says three additional former employees in non-executive roles breached express covenants not to compete in their agreements with Toptal.
While some of the allegations focus on the expertise of the employees, one of the trade secret allegations more directly references Toptal’s technology.
Toptal claims Machi tapped into her extensive knowledge of Toptal’s “proprietary software platform” and used that to help transform Andela “from a group of outsourcing hubs situated in various African locations into a fully remote, global company like Toptal.”
Asked to comment on the suit, Johnson at Andela said he believes Toptal is suing Andela for being competitive.
“With regards to the situation overall, I can say that frivolous lawsuits are the price of doing anything that matters,” he told TechCrunch in an email. “And this is the kind of baseless bullying and fear tactics that make employees want to leave in the first place. We will defend ourselves and our colleagues vigorously.”
Toptal has an unconventional story for a company that started only a decade ago. It is one of the few companies in the Valley that doesn’t issue stock options to its investors or employees. Even Du Val’s co-founder, Breanden Beneschott, was ousted from the company without any shares, according to an article from The Information.
How did it pull this off? In 2012, Toptal raised a $1.4 million seed via convertible notes and investors were entitled to 15% of the company, according to The Information article.
But there was one condition: Toptal had to raise more money.
However, the company hasn’t needed to secure additional capital because of its profitability and growing revenue ($200 million annually as of 2018, per The Information). So investors are stuck in limbo — as are employees who joined hoping that the company would raise money down the line so their stock options would convert.
The Information story strikes a distinct note of resentment, noting that some employees felt “tricked out of stock in a company that Du Val has said publicly is worth more than $1 billion.”
Given that situation, TechCrunch asked Du Val if he thought it played any role in employee departures, and ex-employee relations.
“The issuance of stock options does not excuse theft of trade secrets,” he replied. “Also, there are more than 800 full-time people at Toptal [but] the complaint names seven individual defendants.”
The full complaint is embedded below.
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ChartHop raises $35M for its internal org chart and people analytics platform
Human resources is generally a salient cornerstone of any organization, but digitization has democratized a lot of the work that goes into HR, and that’s meant more people in businesses interested in, and using, the kind of data that HR people build and typically manage. Today, a startup called ChartHop that’s built a platform to cater to that trend is announcing $35 million in funding on the heels of strong growth.
The Series B is being led by Andreessen Horowitz, a past backer, with Elad Gil and previous investors Cowboy Ventures and SemperVirens also participating. We understand from sources close to the company that the round values ChartHop at between $300 million and $400 million.
ChartHop was founded in New York by Ian White, now the CEO, who first started building the tools to fill what he felt were gaps in his own knowledge when he founded, ran and eventually sold his previous company, Sailthru (which was acquired by CampaignMonitor).
He said he realized the company could build “all the tech we wanted,” but when it came down to thinking about how to run and scale the business, that was at its heart actually a people question, and also understanding how departments, and the entire organization, looked and worked as a whole.
Image Credits: ChartHop
“It was not as important as hiring, structuring a ‘single you’ of the organization,” he said. (Ian’s pictured here to the right.) Similar to the great analytics tools that have been built for developers, sales teams and others, “What I wanted was people analytics,” he said. “I wanted to understand my team.”
That’s actually a very multifaceted question. It’s not just a matter of an org chart — a big enough task in its own right that the very day that ChartHop came out of stealth in early 2020, another org chart startup, The Org, launched, too. It’s also retention strategy, employee satisfaction, turnover statistics, diversity statistics, predictive visualizations on finances if one area was compensated differently, or if hiring were frozen, etc. “All of those problems became mine and there was no great software out there to solve for it,” White said.
The ChartHop platform is built like all strong structures these days in the world of tech: tons of integrations to feed data into ChartHop to make it richer; tons of integrations also to export and use that data in more dedicated applications when needed; and an easy way for everyone to update data but also put in place easy and strong protections to keep confidential data as it should be.
And while HR still “owns” the platform, White said, it can be accessed and used by anyone in the organization, and it is.
It seems that others have found the talent management software market lacking for it, too. Since 2019 it went from a team of one — White himself — to 75, with 130 corporates now using its services. The list has a strong list of household company names with a heavy emphasis in tech, from what White showed me. Revenues in the last 12 months — a time when the spread-out nature of many of our workplaces has meant an even greater need for a platform to manage all the information has possibly reached a high water mark — have grown at a rate of 17% month-by-month.
“With HR and people functions so crucial to the growth and success of businesses, it’s unfortunate that most HR teams lack the critical people data to drive organizational decision making,” said David Ulevitch, general partner at Andreessen Horowitz, in a statement. “ChartHop is the solution to this all-too-common problem, and is built by company leaders who have felt this pain personally. ChartHop’s visual approach to people analytics allows leaders to make organizational planning and strategy decisions with confidence. We’re thrilled to lead ChartHop’s Series B because of their impressive growth, the company’s vision, and the terrific, mission-oriented team they’ve assembled.” He also led the company’s seed round in February 2020.
“Since implementing ChartHop earlier this year, we’ve seen significant improvement in our engagement with talent routines as they’re managed via ChartHop,” said Sara Howe, vice president human resources at ZoomInfo, a customer of ChartHop, in a statement. “Our employees have found the simple user interface and the centralized view of their data as the most helpful features. Leaders across ZoomInfo have also leveraged ChartHop to ensure that their organizations are well structured to support our continued rapid growth.”
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4 women in engineering discuss harassment, isolation and perseverence
Women engineers often face workplace and career challenges that their male colleagues don’t because they remain a minority in the profession: Depending on how you count, women make up just 13% to 25% of engineering jobs. That inequity leads to a power imbalance, which can lead to toxic working environments.
One of the more infamous and egregious examples is Susan Fowler’s experience at Uber. In a blog post in February 2017, she described her boss coming on to her in a company chat channel on her first day on the job. She later wrote a book, “Whistleblower,” that described her time at the company in detail.
Fowler’s ordeal cast a spotlight on the harassment women engineers have to deal with in the workplace. In a profession that tends to be male-dominated, behavior ranges from blatant examples, like what happened to Fowler, to ongoing daily microaggressions.
Four female engineers spoke with me about their challenges:
- Tammy Butow, principal software reliability engineer (SRE) at Gremlin
- Rona Chong, software engineer at Grove Collaborative
- Ana Medina, senior chaos engineer at Gremlin
- Yury Roa, SRE technical program manager at ADL Digital Labs in Bogota, Colombia
It’s worth noting that Fowler was also an SRE who worked on the same team as Medina (who was later part of a $10 million discrimination lawsuit against Uber). It shows just how small of a world we are talking about. While not everyone faced that level of harassment, they each described daily challenges, some of which wore them down. But they also showed a strong determination to overcome whatever obstacles came their way.
Feeling isolated
One of the primary issues these women faced throughout their careers is a feeling of isolation due to their underrepresentation. They say that can sometimes lead to self-doubt and an inkling that you don’t belong that can be difficult to overcome. Medina says that there have been times when, intentionally or not, male engineers made her feel unwelcome.
“One part that was really hard for me was those microaggressions on a daily basis, and that affects your work ethic, wanting to show up, wanting to try your best. And not only does that damage your own self-esteem, but your esteem [in terms of] growing as an engineer,” Medina explained.
Roa says that isolation can lead to impostor syndrome. That’s why it’s so important to have more women in these roles: to serve as mentors, role models and peers.
“One barrier for us related to being the only woman in the room is that [it can lead to] impostor syndrome because it is common when you are the only woman or one of few, it can be really challenging for us. So we need to gain confidence, and in these cases, it is very important to have role models and leadership that includes women,” Roa said.
Chong agrees it is essential to know that others have been in the same position — and found a way through.
“The fact that people talk authentically about their own jobs and challenges and how they’ve overcome that, that’s been really helpful for me to continue seeing myself in the tech industry,” she said. “There have been points where I’ve questioned whether I should leave, but then having that support around you to have people to talk to you personally and see as examples, I think it has really helped me.”
Butow described being interviewed for an article early in her career after she won an award for a mobile application she wrote. When the article was published, she was aghast to discover it had been headlined, “Not just another pretty face…”
“I was like, that’s the title?! I was so excited to share the article with my mom, and then I wasn’t. I spent so much time writing the code and obviously my face had nothing to do with it. … So there’s just little things like that where people call it a paper cut or something like that, but it’s just lots of little microaggressions.”
Pushing through
In spite of all that, a common thread among these women was a strong desire to show that they have the technical skill to get past these moments of doubt to thrive in their professions.
Butow said she has been battling these kinds of misperceptions since she was a teenager but never let it stop her. “I just tried to not let it bother me, but mostly because I also have a background in skateboarding. It’s the same thing, right? You go to a skate park and people would say, ‘Oh, can you even do a trick?’ and I was like, ‘Watch me.’ You know, I [would] just do it. … So a lot of that happens in lots of different types of places in the world and you just have to, I don’t know, I just always push through, like I’m just going to do it anyway.”
Chong says she doesn’t give in to discouraging feelings, adding that having other women to talk to helped push her through those times.
“As much as I like to persevere and I don’t like giving up, actually there have been points where I considered quitting, but having visibility into other people’s experiences, knowing that you’re not the only one who’s experienced that, and seeing that they’ve found better environments for themselves and that they eventually worked through it, and having those people tell you that they believe in you, that probably stopped me from leaving when I [might] have otherwise,” she said.
Women helping women
Chong’s experience is not unique, but the more diverse your teams are, the more people who come from underrepresented groups can support one another. Butow recruited her at one point, and she says that was a huge moment for her.
“I think that there is a network effect where we know other women and we try to bring them in and we expand on that. So we can kind of create the change or we feel the change we want to see, and we get to make our situation more comfortable,” Chong said.
Medina says that she is motivated to help bring Latinx and Black people into tech, with a focus on attracting girls and young women. She has worked with a group called Technolachicas, which produced a series of commercials with the Televisa Foundation. They filmed six videos, three in English and three in Spanish, with the goal of showing young girls how to pursue a STEM career.
“Each commercial talks about how we got our career started with an audience persona of a girl younger than 18, an adult influencer and a parent — people that are really crucial to the development of anyone under 18,” she said. “How is it that these people can actually empower someone to look at STEM and to pursue a career in STEM?”
Butow says it’s about lifting people up. “What we’re trying to do is sharing our story and hoping to inspire other women. It’s super important to have those role models. There’s a lot of research that shows that that’s actually the most important thing is just visibility of role models that you can relate to,” she said.
The ultimate goal? Having enough support in the workplace that they’re able to concentrate on being the best engineers they can be — without all of the obstruction.
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