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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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Why I make everyone in my company be the CEO for a day
Leaders become great not because of their power, but because of their ability to empower others.
It’s no secret that most tech companies tout their culture as “unique” or “open,” but when you take a closer look, it’s often merely surface level. Yes, you may be dog-friendly or offer unlimited beer on tap, but how are you helping your employees become the best versions of themselves? We’re at our best when our employees are at their best, so we do everything in our power to make that a reality.
We’re at our best when our employees are at their best, so we do everything in our power to make that a reality.
After successfully running Vincit in Finland and Switzerland, in 2016 we made the jump to the United States, setting up an office in California. Although we had moved over 5,000 miles to a new country, it was important that our two main KPIs remain the same: Employee happiness and customer satisfaction. We believe that happy employees make clients happy, and happy clients refer you to others. Therefore, it was essential that this positive and prosperous workplace environment followed us to the United States.
So beyond traditional benefits, like full medical coverage, 401k matching and standard office amenities, we tapped into our Finnish roots to build and provide our employees with an uninhibited, supportive workplace. We keep our company culture as transparent as possible and fully believe in the power of empowering our employees. We have no managers and no real role hierarchy. Employees do not have to go through an approval process on anything they are working on.
We encourage our employees to make a trip to Finland to visit our headquarters. Instead of “Lunch & Learn” meetings, we host “Fail & Learn” meetings where employees get to share something that didn’t work and what they learned from it. And once a month, we let an employee become the CEO for a day.
Unsurprisingly, the “CEO of the Day” program is one of our most popular initiatives. The program gives our employee the reins for 24 hours with an unlimited budget. The only requirement? The CEO must make one lasting decision that will help improve the working experience of Vincit employees. Whatever the CEO of the Day decides, the company sticks with. They can purchase something for the company, change a policy, update a tool we use … Really, anything that they come up with can be done.
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SmartRecruiters raises $110M at a $1.5B valuation to expand its end-to-end recruitment platform
The global COVID-19 pandemic had a chilling effect on a number of industries and their workforces, resulting in mass furloughs and layoffs. But now, with countries taking steps back to “normal”, that has been leading, in many cases, back to a hiring surge. Today, SmartRecruiters, one of the companies that has built software to handle that process more smoothly, is announcing $110 million in funding to seize the moment.
The funding, a Series E, is coming in at a $1.5 billion valuation, the company confirmed. Silver Lake Waterman is leading this round, with previous backers Insight Partners and Mayfield Fund also participating.
The investment will be used in two areas. First, SmartRecruiters plans to continue expanding business — its primary customers are large enterprises, with Visa, Square, McDonald’s, Ubisoft, FireEye, Biogen, Equinox and Public Storage among them, and the plan will be to bring on more of these globally. Jerome Ternynck, SmartRecruiters’ CEO and founder, pointed out that one of its clients, Pilot Travel Centers, made a move recently in which it had to swiftly ramp up by 10,000 people in 90 days.
“That is the scale of the great rehire that we are aiming to serve,” he said.
And second, it plans to hire and invest more in product. Specifically, Ternynck said the company is looking to build more intelligence into its platform, so that it can help customers find ideal matches for roles and provide them with tools to automate and reduce the busy work of managing a recruitment process.
This is a notable area for growth, and one that smaller startups have also identified and are building to fix: Just yesterday, one of them, Dover, announced a Series A.
Ternynck likes to describe SmartRecruiters as “the Salesforce of recruiting”, by which he means that it provides a system of record for large enterprises that can manage 100% of the process of recruitment, from sourcing candidates to hiring.
“In recruiting tech, we are the mothership,” he said, with some 600 vendors integrated into its platform — a mark of how fragmented the wider industry really is.
(Salesforce, incidentally, is an investor in SmartRecruiters, and while right now it’s not directly working with its portfolio company to build recruitment into what it operates as essentially a massive CRM behemoth, it’s an interesting prospect and seems like a no-brainer that it might try to some day. Ternynck would not comment…)
There are already a lot of application tracking systems in the market that can handle the basics of logging candidates and managing their progress through the screening, interview, references and hiring/rejection cycle — Ternynck, in fact founded and sold one of the pioneers in that space. But the problem with these is that they are limited and often work within their own silos. He refers to these ATS systems as “the first generation” of recruitment software, a generation that is now getting replaced.
There are some big changes driving that evolution, and specifically SmartRecruiters’ growth. One key area is the bigger shift in “digital transformation”, precipitated by the pandemic but also a bigger shift to cloud-based computing and evolutions in big data management. Fragmentation is rife in recruiting, but we now are equipped in the world of IT with many, many ways of navigating that and using the wide amount of information out there to our advantage.
But there is another, more epistemological shift, too. Recruitment, and talent in general, has become a critical part of how a company conceives of its future success. Get the right people on board and you will grow. Fail to hire correctly and you will not, and you might even fail.
“This round and our progression signals the fact that CEOs have been forced to care more about recruiting,” he said. They want want to hire the best, he added, but that is fundamentally different from how recruiting has traditionally been approached, which is focused on cost per hire.
“This means recruiting is coming out of the administration function and into value add and sales and marketing,” he added. (That’s another interesting parallel with Dover, which has gone so far as to conceive of its recruitment approach as “orchestration”, a word more commonly associated with sales software.)
The pandemic has had an impact here, too: employees and “hires” today are not what they used to be. It has become more acceptable to work remotely, and what people have come to expect out of jobs, and what roles they are coming from when applying, are all so different, and that also demands a different kind of platform to engage with them.
Indeed, that bigger area — sometimes referred to as “the future of work” — is part of what attracted this investment.
“Hiring talent and building human capital is more complex and important than ever, and SmartRecruiters is well positioned to help companies attract and land top talent,” said Shawn O’Neill, managing director and group head, Silver Lake Waterman, in a statement. “Their scale and customer growth are testament to their strong leadership and industry leading platform. We are excited to help fuel SmartRecruiters’ next growth chapter.”
Interestingly, Ternynck noted that even despite the mass layoffs and furloughs experienced in some industries in the last year and a half, SmartRecruiters has seen business grow, even through some of the worst moments of COVID-19. Over the last 12 months, bookings have grown by 70%, he said. That’s a mark of how recruiting priorities are indeed changing, regardless of whether it’s a SmartRecruiters, or another kind of company entirely — and there are many, from Taleo and Cornerstone, through to smaller hopefuls like Dover, and even Salesforce — who might reap the spoils longer term.
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Dover raises $20M to bring the concept of ‘orchestration’ to recruitment
Despite being one of the earliest adopters of using the world wide web to disrupt how its business is done and connect with more potential customers, the recruitment industry ironically remains one of the more fragmented and behind the times when it comes to using new, cloud-based services to work more efficiently. A new startup is hoping to change that, and it’s picked up some funding on strong, early signs of traction.
Dover, which has built what CEO and co-founder Max Kolysh describes as a “recruitment orchestration platform” — aimed at recruiters, it helps them juggle and aggregate multiple candidate pools to source suitable job candidates automatically, and then manage the process of outreach (including using tools to automatically re-write job descriptions, as well as to write recruitment and rejection letters) — has raised $20 million from an impressive list of investors.
Tiger Global led the Series A round, with Founders Fund, Abstract Ventures and Y Combinator also investing. Dover was part of YC’s Summer 2019 class (which debuted in August 2020), and Founders Fund led its seed round. Since leaving the incubator, it has picked up more than 100 customers, mostly from the world of tech, including ClearCo, Lattice, Samsara and others, even larger companies that you might have assumed would have their own in-house orchestration and automation platforms in place already.
“Orchestration” in the world of business IT is commonly used for software built for the fields of sales and marketing: In both of these, there is a lot of fragmentation and work involved in sourcing good leads to become potential customers, and so tech companies have built platforms both to source interesting contacts and handle some of the initial steps needed to reach out to them, and get them engaged.
That, it turns out, is a very apt way to think of the recruitment industry, too, not least because it also, to a degree, involves a company “selling” itself to candidates to get them interested.
“I would say recruiting is sales and marketing,” Kolysh said. “We’re comparable to sales ops, but sales is five-10 years ahead in terms of technology.”
Recruiters and hiring managers, especially those working in industries where talent is at a premium and therefore proactively hiring good people can be a challenge, are faced with a lot of busy work to find interesting candidates and engage them to consider open jobs, and subsequently handling the bigger process of screening, reaching out to them and potentially rejecting some while making offers to others.
This is mainly because the process of doing all of these is typically very fragmented: Not only are there different tools built to handle these different processes, but there is an almost endless list of sources today where people go to look for work, or get their names out there.
Dover’s approach is based on embracing that fragmentation and making it easier to handle. Using AI, it taps platforms like LinkedIn, Indeed and Triplebyte — a likely list, given its initial focus on tech — to source candidates that it believes are good fits for a particular opening at a company.
Dover does this with a mix of AI and understanding what a recruiter is looking for, plus any extra parameters if they have been set by the recruiter to carry this out (for example, diversity screening, if the employer would like to have a candidate pool that is in line with a company’s inclusion targets).
Dover also uses data science and AI to help calibrate a recruiter’s communications with would-be candidates, from the opening job description through to job offer or rejection letters. (Why dwell on rejection letters? Because these candidates are already in a short list, and so even if they didn’t get one particular job, they are likely good prospects for future roles.)
“No human wants to write 100 cold emails per week, but on the other hand, there are many people to hit up and connect with,” Kolysh said of the challenges that recruiters face. “When a company is seeing a lot of growth, it needs to scale fast. You just can’t do that without technology anymore.” Kolysh — who co-founded the company with Anvisha Pai (CTO) and George Carollo (COO) — said all three founders experienced that firsthand working at previous startups and trying to recruit while also building the other aspects of the business. (They are pictured above, along with founding engineer John Holliman.)
Given how much orchestration has caught on in the world of sales, there is a strong opportunity here for Dover to bring a similar approach to recruitment, based on what seems to be a very close understanding of the flawed recruitment process as it exists today. Whether that brings more competitors to the space — or more tools from some of the bigger players in, say, candidate sourcing — will be one factor to watch, as will how and if Dover manages to make the leap to other industries beyond tech.
But for now, its usefulness for a particular segment of the market is also what caught the eye of Tiger Global.
John Luttig, the partner who led the investment for Founders Fund, noted in an interview that most recruiting tools in the market today might best be described as point solutions, addressing scheduling or interviews, for example.
“It’s the full stack here that is appealing,” he told me. “And it’s automated, which is particularly valuable for early and mid-stage tech companies, to keep candidates from falling through the cracks. It also saves time from having to build up big recruiting departments. And because Dover owns all that work, those working in recruitment can instead focus on culture building, or assessing the candidates.”
Updated to note that Luttig is at Founders Fund, and to correct that the customer is ClearCo.
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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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3 analysts weigh in: What are Andy Jassy’s top priorities as Amazon’s new CEO?
It’s not easy following a larger-than-life founder and CEO of an iconic company, but that’s what former AWS CEO Andy Jassy faces this week as he takes over for Jeff Bezos, who moves into the executive chairman role. Jassy must deal with myriad challenges as he becomes the head honcho at the No. 2 company on the Fortune 500.
How he handles these challenges will define his tenure at the helm of the online retail giant. We asked several analysts to identify the top problems he will have to address in his new role.
Ensure a smooth transition
Handling that transition smoothly and showing investors and the rest of the world that it’s business as usual at Amazon is going to be a big priority for Jassy, said Robin Ody, an analyst at Canalys. He said it’s not unlike what Satya Nadella faced when he took over as CEO at Microsoft in 2014.
Handling the transition smoothly and showing investors and the rest of the world that it’s business as usual at Amazon is going to be a big priority for Jassy.
“The biggest task is that you’re following Jeff Bezos, so his overarching issue is going to be stability and continuity. … The eyes of the world are on that succession. So managing that I think is the overall issue and would be for anyone in the same position,” Ody said.
Forrester analyst Sucharita Kodali said Jassy’s biggest job is just to keep the revenue train rolling. “I think the biggest to-do is to just continue that momentum that the company has had for the last several years. He has to make sure that they don’t lose that. If he does that, I mean, he will win,” she said.
Maintain company growth
As an online retailer, the company has thrived during COVID, generating $386 billion in revenue in 2020, up more than $100 billion over the prior year. As Jassy takes over and things return to something closer to normal, will he be able to keep the revenue pedal to the metal?
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Jim Whitehurst steps down as president at IBM just 14 months after taking role
In a surprise announcement today, IBM announced that Jim Whitehurst, who came over in the Red Hat deal, would be stepping down as company president just 14 months after taking over in that role.
IBM didn’t give a lot of details as to why he was stepping away, but acknowledged his key role in helping bring the 2018 $34 billion Red Hat deal to fruition and helping bring the two companies together after the deal closed. “Jim has been instrumental in articulating IBM’s strategy, but also, in ensuring that IBM and Red Hat work well together and that our technology platforms and innovations provide more value to our clients,” the company stated.
He will stay on as a senior adviser to Krishna, but it begs the question why he is leaving after such a short time in the role, and what he plans to do next. Oftentimes after a deal of this magnitude closes, there is an agreement as to how long key executives will stay. It could be simply that the period has expired and Whitehurst wants to move on, but some saw him as the heir apparent to Krishna and the move comes as a surprise when looked at in that context.
“I am surprised because I always thought Jim would be next in line as IBM CEO. I also liked the pairing between a lifer IBMer and an outsider,” Patrick Moorhead, founder and principal analyst at Moor Insight & Strategies told TechCrunch.
Regardless, it leaves a big hole in Krishna’s leadership team as he works to transform the company into one that is primarily focused on hybrid cloud. Whitehurst was undoubtedly in a position to help drive that change through his depth of industry knowledge and his credibility with the open source community from his time at Red Hat. He is not someone who would be easily replaced and the announcement didn’t mention anyone filling his role.
When IBM bought Red Hat in 2018 for $34 billion, it led to a cascading set of changes at both companies. First Ginni Rometty stepped down as CEO at IBM and Arvind Krishna took over. At the same time, Jim Whitehurst, who had been Red Hat CEO moved to IBM as president and long-time employee Paul Cormier moved into his role.
At the same time, the company also announced some other changes including that long-time IBM executive Bridget van Kralingen announced she too was stepping away, leaving her role as senior vice president of global markets. Rob Thomas, who had been senior vice president of IBM cloud and data platform, will step in to replace Van Kraligen.
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Pequity, a compensation platform designed for more equitable pay, raises $19M
Diversity and inclusion have become central topics in the world of work. In the best considerations, improving them is a holistic effort, involving not just conceiving of products with this in mind, but hiring and managing talent in a diverse and inclusive way, too. A new startup called Pequity, which has built a product to help with the latter of these areas, specifically in equitable compensation, has now raised some funding — a sign of the demand in the market, as well as how tech is being harnessed in aid of helping it.
The San Francisco-based startup has raised $19 million in a Series A led by Norwest Venture Partners. First Round Capital, Designer Fund, and Scribble Ventures also participated in the fundraise, which will be used to continue investing in product and also hiring: the company has 20 on its own books now and will aim to double that by the end of this year, on the heels of positive reception in the market.
Since launching officially last year, Pequity has picked up over 100 customers, with an initial focus on fast-scaling companies in its own backyard, a mark of how D&I have come into focus in the tech industry in particular. Those using Pequity to compare and figure out compensation include Instacart, Scale.ai and ClearCo, and the company said that in the last four months, the platform’s been used to make more then 5,000 job offers.
Image Credits: Pequity (opens in a new window)
Kaitlyn Knopp, the CEO who co-founded the company with Warren Lebovics (both pictured, right), came up for the idea for Pequity in much the same way that many innovations in the world of enterprise IT come to market: through her own first-hand experience.
She spent a decade working in employment compensation in the Bay Area, with previous roles at Google, Instacart, and Cruise. In that time, she found the tools that many companies used were lacking and simply “clunky” when it came to compensation analysis.
“The way the market has worked so far is that platforms had compensation as an element but not the focus,” she said. “It was the end of the tagline, the final part of a ‘CRM for candidates.’ But you still have to fill in all the gaps, you have to set the architecture the right way. And with compensation, you have to bake in your own analytics, which implies that you have to have some expertise.”
Indeed, as with other aspects of enterprise software, she added that the very biggest tech companies sometimes worked on their own tools, but not only does that leave smaller or otherwise other-focused businesses out of having better calculation tools, but it also means that those tools are siloed and miss out on being shaped by a bigger picture of the world of work. “We wanted to take that process and own it.”
The Pequity product essentially works by plugging into all of the other tools that an HR professional might be using — HRIS, ATS, and payroll products — to manage salaries across the whole of the organization in order to analyse and compare how compensation could look for existing and prospective employees. It combines a company’s own data and then compares it to data from the wider market, including typical industry ranges and market trends, to provide insights to HR teams.
All of this means that HR teams are able to make more informed decisions, which is step number one in being more transparent and equitable, but is also something that Pequity is optimized to cover specifically in how it measures compensation across a team.
And in line with that, there is another aspect of the compensation mindset that Knopp also wanted to address in a standalone product, and that is the idea of building a tool with a mission, one of providing a platform that can bring in data to make transparent and equitable decisions.
“A lot of the comp tools that I’ve interacted with are reactive,” she said. “You may have to do, say, a pay equity test, you do your promotion and merit cycles, and then you find all these issues that you have to solve. We’re flagging those things proactively with our analytics, because we’re plugging into those systems, which will give you those alerts before the decisions need to be made.”
As an added step in that direction, Knopp said that ultimately she believes the tool should be something that those outside of HR, such as managers and emploiyees themselves, should be able to access to better understand the logic of their own compensation and have more information going into any kind of negotiation.
Ultimately, it will be interesting to see whether modernized products like Pequity, which are tackling old problems with a new approach and point of view, find traction in the wider market. If one purpose in HR is to address diversity and inclusion, and part of the problem has been that the tools are just not fit for that purpose, then it seems a no-brainer that we’ll see more organizations trying out new things to see if they can help them in their own race to secure talent.
“Compensation reflects a company’s values, affects its ability to hire talent, and is the biggest expense on its P&L. And yet, most comp teams run on spreadsheets and emails,” said Parker Barrile, Partner at Norwest, in a statement. “Pequity empowers comp teams to design and manage equitable compensation programs with modern software designed by comp professionals, for comp professionals.”
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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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New Relic’s business remodel will leave new CEO with work to do
For Bill Staples, the freshly appointed CEO at New Relic, who takes over on July 1, yesterday was a good day. After more than 20 years in the industry, he was given his own company to run. It’s quite an accomplishment, but now the hard work begins.
On the positive side of the equation, New Relic is one of the market leaders in the application performance monitoring space.
Lew Cirne, New Relic’s founder and CEO, who is stepping into the executive chairman role, spent the last several years rebuilding the company’s platform and changing its revenue model, aiming for what he hopes is long-term success.
“All the work we did in re-platforming our data tier and our user interface and the migration to consumption business model, that’s not so we can be a $1 billion New Relic — it’s so we can be a multibillion-dollar New Relic. And we are willing to forgo some short-term opportunity and take some short-term pain in order to set us up for long-term success,” Cirne told TechCrunch after yesterday’s announcement.
On the positive side of the equation, New Relic is one of the market leaders in the application performance monitoring space. Gartner has the company in third place behind Dynatrace and Cisco AppDynamics, and ahead of DataDog. While the Magic Quadrant might not be gospel, it does give you a sense of the relative market positions of each company in a given space.
New Relic competes in the application performance monitoring business, or APM for short. APM enables companies to keep tabs on the health of their applications. That allows them to cut off problems before they happen, or at least figure out why something is broken more quickly. In a world where users can grow frustrated quickly, APM is an important part of the customer experience infrastructure. If your application isn’t working well, customers won’t be happy with the experience and quickly find a rival service to use.
In addition to yesterday’s CEO announcement, New Relic reported earnings. TechCrunch decided to dig into the company’s financials to see just what challenges Staples may face as he moves into the corner office. The resulting picture is one that shows a company doing hard work for a more future-aligned product map and business model, albeit one that may not generate the sort of near-term growth that gives Staples ample breathing room with public investors.
Near-term growth, long-term hopes
Making long-term bets on a company’s product and business model future can be difficult for Wall Street to swallow in the near term. But such work can garner an incredibly lucrative result; Adobe is a good example of a company that went from license sales to subscription incomes. There are others in the midst of similar transitions, and they often take growth penalties as older revenues are recycled in favor of a new top line.
So when we observe New Relic’s recent result and guidance for the rest of the year, we’re more looking for future signs of life than quick gains.
Starting with the basics, New Relic had a better-than-anticipated quarter. An analysis showed the company’s profit and adjusted profit per share both beat expectations. And the company announced $173 million in total revenue, around $6 million more than the market expected.
So, did its shares rise? Yes, but just 5%, leaving them far under their 52-week high. Why such a modest bump after so strong a report? The company’s guidance, we reckon. Per New Relic, it expects its current quarter to bring 6% to 7% growth compared to the year-ago period. And it anticipates roughly 6% growth for its current fiscal year (its fiscal 2022, which will conclude at the end of calendar Q1 2022).
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