This morning, Everee, a Utah-based software-as-a-service (SaaS) startup focused on payroll, announced that it had completed a $ 10 million Series A. The funding event was led by Origin Ventures and Signal Peak Ventures. Previously, Everee had collected a $ 3.7 million seed round in mid-2019.
The company is therefore just as well capitalized as in its life, especially when the economy is going through a difficult phase. TechCrunch spoke to one of the company’s founders, Ron Ross, and his new CEO Brett Barlow (formerly from Utah Unicorn Pluralsight) about the new capital and what it plans to do with it.
According to Ross, the company was founded out of a problem that he saw in the market. When his daughter went to college and started working, she made enough to cover her expenses, but the timing of her income did not meet her cash flow needs, so she had to ask her parents for occasional loans. Ross was unhappy with the situation until he looked at it in more detail and found that today’s payroll system doesn’t always match workers’ cash needs.
And with it Everee was born, a SaaS tool that does the payroll with a neat twist. Instead of paying employees only every two weeks, the service offers more flexible payment options. Thanks to the cheaper service, employees can choose to withdraw twice a week, every two weeks or monthly. Thanks to the more expensive service, workers can also pay their earnings daily or weekly.
That may sound strange, but it makes sense; Why should workers’ wages be tied up for weeks until they get them? It’s damn stupid. If you work, you should be paid immediately. That would be more worker-friendly and it should be reasonable and common with modern banking.
Everee also does what you’d expect from a payroll service, such as onboarding, timecard management, and the rest. I was a little surprised at the price, which starts at $ 15 per worker per month for its cheaper service ($ 10- Dollars a month with more employees), but the company told me that the price is largely in line with the competition.
Before we close, a financial fold. Everee does not change a company’s cash flow if its employees choose to pay out faster than normal. Instead, the cash flow changes are covered by a credit facility itself. The company then eats this cost of capital as a cost of sales (COGS), which means that it requires a gross margin hit to offer its payment if you want to be paid. Why does that matter? This means Everee is changing its sales quality to offer decent service. This is not a stroke, but rather a note. According to its executives, Everee saves up to a point about 5 points less than its gross margin so that workers can be paid faster.
To put it bluntly, Everee is a SaaS company that is likely to be profitable, but I’m a fan of tools that help workers, so I wanted to highlight how the system works.
Finally, how will Everee approach growth in a market where hourly workers are being fired across the country? When TechCrunch spoke to the company, it found that there were still a large number of employees, including grocery and other key infrastructure workers. There will still be a market to grow into, or at least the money to move around until the job market returns.