Feb
02
2021
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Oyster snaps up $20M for its HR platform aimed at distributed workforces

The growth of remote working and managing workforces that are distributed well beyond the confines of a centralized physical office — or even a single country — have put a spotlight on the human resources technology that organizations use to help manage those people. Today, one of the HR startups that’s been seeing a surge of growth is announcing a round of funding to double down on its business.

Oyster, a startup and platform that helps companies through the process of hiring, onboarding and then providing contractors and full-time employees in the area  of “knowledge work” with HR services like payroll, benefits and salary management, has closed a Series A round of $20 million.

The company is already working in 100 countries, and CEO and Tony Jamous (who co-founded the company with Jack Mardack) said in an interview that the plan is to expand that list of markets, and also bring in new services, particularly to address the opportunity in emerging markets to hire more people.

Currently, Oyster does not cover candidate sourcing or any of the interviewing and evaluation process: those could be areas where it might build its own tech or partner to provide them as part of its one-stop shop. It has dabbled in virtual job fairs, as a pointer to one potential product that it might explore.

“There are 1.5 billion knowledge workers coming into the workforce in the next 10 years, mostly from emerging economies, while in developed economies there are some 90 million jobs unfilled,” Jamous said. “There are super powers you can gain from being globally distributed, but it poses a major challenge around HR and payroll.”

Emergence Capital, the B2B VC that has backed the likes of Zoom, Salesforce, Bill.com and our former sister site Crunchbase, is leading the funding. The Slack Fund (Slack’s strategic investment vehicle) and London firm Connect Ventures (which has previously backed the company at seed stage) are also participating. The investment will accelerate Oyster’s rapid growth, and support its mission of enabling people to work from anywhere.

Oyster’s valuation is not being disclosed. The startup has raised about $24 million to date.

One of the great ironies of the global health pandemic is that while our worlds have become much smaller — travel and even local activities have been drastically curtailed, and many of us spend day in, day out at home — the employment opportunity and scope of how organizations are expected to operate has become significantly bigger.

Public health-enforced remote working has led to companies de-coupling workers from offices, and that has opened the door to seeking out and working with the best talent, regardless of location.

This predicament may have become more acute in the last year, but it’s been one that has been gradually coming into focus for years, helped by trends in cloud computing and globalization. Jamous said that the idea for Oyster that came to him was something he’s been thinking about for years, but became more apparent when he was still at his previous startup, Nexmo — the cloud communications provider that was acquired by Vonage for $230 million in in 2016. 

At Nexmo we wanted to be a great local employer. We were headquartered in two countries but wanted to have people everywhere,” he said. “We spent millions building employment infrastructure to do that, becoming knowledgeable about local laws in France, Korea and more countries.” He realized quickly that this was a highly inefficient way to work. “We weren’t ready for the complexity and diversity of issues that would come up.”

After he moved on from Nexmo and did some angel investing (he backs other distributed work juggernauts like Hopin, among others), he decided that he would try to tackle the workforce challenge as the focus of his next venture.

That was in mid-2019, pre-pandemic. It turned out that the timing was spot on, with every organization looking in the next year at ways to address their own distributed workforce challenges.

The emerging market focus, meanwhile, also has a direct link to Jamous himself: He left his home country of Lebanon to study in France when he was 17, and has essentially lived abroad since then. But as with many people who move from developed into emerging markets, he knew that the base of technical talent in his home country was something that was worth tapping and nurturing to help residents and the countries themselves improve their lots in life; and he thought he could use tech to help there, too.

Related to that wider social mission, Oyster has a pending application to become a B-Corporation.

Jamous is not the only one that has founded an HR company based on his personal experience: Turing’s founders have cited their own backgrounds growing up in India and working with people remotely from there as part of their own impetus for building Turing; and Remote’s founder hails from Europe but built GitLab (where he had been head of product) based on a similar premise of tapping into the talent he knew existed all around the world.

And indeed, Oyster is not alone in tackling this opportunity. The list of HR startups looking to be the ADPs of the world of distributed work include Deel, Remote, Hibob, Papaya Global, Personio, Factorial, Lattice, Turing and Rippling. And these are just some of the HR startups that have raised money in the last year; there are many, many more.

The attraction of Oyster seems to come in the simplicity of how the services are provided — you have options for contractors and full-timers, and full, larger staff deployments in other countries. You have options to add benefits for employees if you choose. And you have some tools to work out how hires fit into your bigger budgets, and also to guide you on remuneration in each local market. Pricing ranges from $29 per person, per month for contractors, to $399 for working with full employees, to other packages for larger deployments.

Oyster works with local partners to provide some aspects of these services, but it has built the technology to make the process seamless for the customer. As with other services, it essentially handles the employment and payroll as a local provider on behalf of its customers, but can do so under contract terms that reconcile both a company’s own policies and those of the local jurisdictions (which can differ widely between each other in areas like vacation time, redundancy terms, maternity leave and more).

“It has a few well-funded competitors, but that’s usually a good signal,” said Jason Green, the Emergence partner who led its investment. “But you want to bet on the horse that will lead the race, and that comes down to execution. Here, we are betting on a team that’s done it before, an entrepreneur experienced in building a company and selling it. Tony’s made money and knows how to build a business. But more than that, he’s mission driven and that will matter in the space, and to employees.”

Nov
14
2018
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ServiceTitan raises $165M for its home services software, now valued at $1.65B

ServiceTitan, a startup out of Glendale, Calif. that has built a software platform for home services businesses — in areas like air conditioning, plumbing and electrical repairs — to manage their work, has raised $165 million in what it claims is the “largest software raise in Southern California history.”

(That distinction might be specifically for B2B software, since Snap, as one example, raised billions before it went public, when it was still known as the app startup Snapchat.)

The company has confirmed that its valuation is now at $1.65 billion — making it the newest unicorn out of the region (and fulfilling a prediction we made earlier this year).

This latest round, a Series D, was led by Index Ventures. New backers Dragoneer and T. Rowe Price also participated, along with existing investors Battery Ventures, Bessemer Venture Partners and ICONIQ Capital.

It’s coming just seven months after ServiceTitan raised its last round: rapid funding rounds of large sums of money, raised within months of each other, seems to be a trend at the moment, underscoring the current state of the market where VCs have themselves raised huge funds and are looking for safe harbors and fast-growing companies in which to invest them. (As two examples, just earlier today, UiPath announced another huge round, its third fundraising this year; and Nikola Trucking also raised its second round of the year.)

The funding will be used for bringing on more talent — it’s already hired from Google, Netflix, Adobe and Accel — as well as business development and to build more software to fill out a vision of becoming “the operating system for home services.” It’s also been making acquisitions, and this could help with that, too.

This is potentially a huge market, with some $400 billion spent on home service repairs annually in the U.S. alone.

ServiceTitan was co-founded by two Armenian Americans, Ara Mahdessian and Vahe Kuzoyan, in 2012, after they met on a ski trip organized by the Armenian student associations at Stanford and the University of Southern California when they were still were in college. The startup was borne out of work both were doing after college to build software to help their fathers, who worked in air conditioning contracting, run their businesses. 

Small businesses often are some of the most overlooked when it comes to tech innovations, even more so when they come from relatively unsexy industries like air conditioning repair, but they need solutions as much as larger organizations. ServiceTitan’s rise has come from filling that gap in the market.

It says it is on track to double subscription revenues this year, with some 2,500 customers on board covering some 50,000 technicians and $10 billion of services in areas like plumbing, air conditioning, electrical and garage door repair, working out to nearly 20 percent of homes across the U.S. and Canada.

“The ServiceTitan mission has always been personal to us,” said Mahdessian, co-founder and CEO of ServiceTitan, in a statement. “Our software powers the tireless men and women of home services who ensure the world has the basic necessities of life: running water, relief from the scorching heat and biting cold, power and electricity, and more. We take it for granted today, until our toilets back up, our air conditioning goes out during the heat of summer, or our lights go out in the middle of the night. These are the heroes that come to our rescue, and we’re here to help them be more efficient and successful.”

ServiceTitan is not the only company eyeing up the space, of course: aggregators like Amazon and Angi Homeservices (formerly Angie’s List) are providing a way for independent contractors and small franchises to connect with customers, and they will inevitably also look to provide the accounting and other software to help these companies run their businesses in their two-sided marketplaces.

ServiceTitan believes it has an edge. “Our software helps our customers with nearly every workflow in their business, including CRM, scheduling, dispatch, mobile invoicing, payments, inventory, and more,” said Kuzoyan, co-founder and president of ServiceTitan, in a statement. “We’re now integrating with large partners to enable the future of home services, including real-time appointment booking integrations with partners like Yelp and others, as well as supply-chain integration with partners like Lennox and others.”

With this round, Index’s Nina Achadjian is joining the board. “Ara and Vahe started ServiceTitan because they wanted to solve the pain point they felt firsthand running their fathers’ businesses,” she said. “Since then, the company has revolutionized how plumbers, electricians, air conditioning technicians and thousands of others in other trades run their businesses. The best part is that ServiceTitan is just getting started. We could not be more excited to be a part of their journey to transform the $400 billion home services market.”

Oct
20
2016
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India’s Wipro buys cloud consultancy and work marketplace Appirio for $500M

clouds Some more consolidation afoot in the cloud services industry, specifically around integration services. Wipro, a IT services company originally founded in India, announced that it has acquired Appirio — a consultancy focused on cloud services and cloud integration — for $500 million.
The deal confirms earlier reports of the acquisition, where the rumored price was $400… Read More

Jun
22
2016
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Lystable gets $11M Series A to push its gig economy SaaS in the US

lystable (1 of 4) Ahoy there gig economy… Lystable, which makes a software tool focused on helping businesses manage freelancers, has closed an $11 million Series A round led by Peter Thiel’s Valar Ventures and Goldcrest Capital. Spring Partners also participated in the round. Read More

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