Remote raises $35M to help orgs with global workforce payroll, benefits and more
Remote working has become the norm in many offices around the world this year, as organizations do what they can to help contain the rapid transmission of Covid-19 by reducing in-person interactions between workers. That’s also meant a renewed focus on how companies manage employees who have never worked in the office, and might even live outside the country. Today, one of the startups helping to manage those workers — appropriately, itself named Remote — is announcing a significant round of funding.
The startup has closed a round of $35 million, a Series A that is being led by Index Ventures, with participation also from Sequoia Capital and some pretty notable angel investors, including Aaron Levie, Zach Weinberg, and Kevin and Julia Hartz. It brings the total raised by Remote to $46 million to date after the company — founded in 2019 — raised $11 million in a seed round earlier this year.
Remote plans to use the funding to expand its business to 30 countries, from 17 at the moment, on the back of doubling its customer base every month since launching earlier this year.
The opportunity and challenge that Remote is tackling will be a familiar one to anyone who works in a company that has people spread across different countries.
You may have found the perfect person to fill a role, and if that person was in your city, he or she would be working in the office as a full-time employee. But because that person lives elsewhere, and it’s too complicated to sort out the employment terms, he or she instead gets paid essentially like a regular freelancer, with no benefits or other kinds of coverage you typically get in a full-time contract (which could include maternity leave, or redundancy terms, or shares in the company, and more). That poses tricky questions both for the employer and the employee: is the employer still legally bound to provide full-time benefits? Should the employee seek a job elsewhere to get a more complete package and more security?
Remote was built in essence to address all that and more. It acts as the middle man, working with the company and the employee in his/her home market to figure out how best to employ that person — whether as full-time or as a permanent contractor — and then handles payroll and more with a network of localised legal entities that it has built from the ground up to handle everything, from employer of record services, to payroll, benefits, taxes and visa and immigration services when they are needed, as well as a platform to cover payments when the employee in question is a contractor.
Its customers range in size from 10 employees to a few thousand, said Job van der Voort, the CEO, in an interview. “We are basically agnostic in that sense,” he added.
Remote was co-founded by two European transplants to San Francisco who have first-hand 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 5 to 450 employees working remotely (and it’s now a customer of Remote’s). CTO Marcelo Lebre most recently had been VP of engineering for Unbabel — another startup focused on reducing international barriers, this time between how companies and global customers communicate.
Remote is part of a veritable wave of startups that have emerged with significant funding this year to bring more services to businesses to better manage international workforces. They include Deel ($30 million raised in September), Papaya Global ($40 million also in September), Lattice ($45 million in July), Factorial ($16 million in April) and Turing ($14 million in August with another round coming soon), among others.
There are also others like Gusto and Rippling who handle payroll domestically (taking on incumbents like ADP) but clearly will have their eye on international markets and global workforces to fuel their growth longer term. Some of these, like Deel, are direct competitors, while others are working in areas adjacent to it and could potentially become more competitive over time.
Van der Voort says that the unique thing with Remote (apart from having the most obviously well-branded name) is that it has taken care to build each part of its business from the ground up.
“There are many companies that message the same thing: payroll for remote teams,” he said. “But they tend to rely on third parties which we don’t.”
That is partly what stood out for investors, too. Hannah Seal at Index said that her firm has been investing in Remote since the pre-seed round, and that relationship has helped her and the firm with other deals in recent times.
“When we first invested in Remote they were in Portugal, and we never met them in person,” she said of the San Francisco startup. “It wasn’t because of the pandemic that we did the pitch over Zoom, but because of how they were set up. That meant we had to build that relationship remotely. It has its challenges but we are working through that and making it work and we are increasingly open to investing in the best founders, regardless of where they live.”
“The future of work will involve many remote employees. Remote is addressing a key area of friction in the global economy by opening up the availability of talent to all businesses and the range of opportunities to individuals,” said Ravi Gupta, a partner at Sequoia Capital, in a statement. “We are excited to support Remote in its drive to reshape the global talent market.”