Sydney HR startup Flare has raised $21 million in a Series B round led by New York venture capital firm Point72 Ventures, with participation from investors including existing backers Reinventure and BridgeLane.
With Acorn Capital and Tank Stream Ventures also participating in the round, the Series B follows the company’s $7 million raise last August. It will be put towards the company’s local growth and the expansion of its financial wellness and benefits platform.
Founded in 2015 by Colin Mierowsky, Daniel Cohen, Jan Pacas, Saul Kaplan, and James Windon, Flare has created an all-in-one human resources platform, assisting businesses with everything from onboarding to payroll through to providing employee benefits.
The benefits employers can provide are varied, from discounts on shopping and entertainment to access to financial wellness services, including webinars, in-house seminars, one on one financial health checks, and online financial education and literacy.
Flare sees significant potential for growth with the financial wellness aspect in particular, and it was also this offering that was of interest to Point72 Ventures.
Pete Casella, partner at Point72, said Flare has “reimagined the role that a workplace can play in your financial life”.
“By focusing on the employer – employee relationship, they can empower individuals to take control of their money at the source, driving financial wellness across entire organisations.”
Casella will join the Flare board in hand with Point72’s investment.
Windon, managing director of Flare, said the startup wants to help Australian employees take their first steps to manage their career development and financial health.
“When people have more information and control over their money, particularly their pay, they can make smarter decisions about how to spend it. This is something that Point72 have embraced and have believed in.”
With the startup now serving over 200 clients, among them Sephora, Knight Frank, and General Pants Co, and in turn more than 100,000 employees across Australia, Windon admitted that while selling customers on Flare’s regular HR features – the onboarding, payroll, and the like – is fairly uncomplicated, the financial wellbeing takes some explaining.
“It’s a straightforward discussion: it takes you four hours to onboard an employee, and it’s a bad experience; use Flare and it will take you three minutes and it will be an awesome experience. It’s very much a problem-solution, pain point-solution paradigm,” Windon said.
“It’s becoming increasingly clear, though, that financial wellness is an important issue to consider. I think that the employer-employee relationship and paradigm has changed, and there is an understanding that it’s no longer sufficient to offer an a employee paycheck.
“They’re looking to employers for more than that, and when you have unemployment as low as it is today and when you have a millennial workforce with meaningfully higher expectations on a whole range of other facets of their life than anyone’s had in history, those expectations spill into what they can get out of the workplace and what their employer can provide them.”
While Windon sees this is being driven, in large part, from the bottom up by employees, he said employers too are increasingly realising the power of providing such services in helping to attract and retain employees.
The startup will be focusing its attention for the time being on further growth around Australia, with Windon saying the decision to bring on funding from a US investor was less about seeking out a US-based fund and more about finding a like-minded investment partner.
“[Point72’s] portfolio is amazing, and not just in terms of where it’s going from a venture perspective and a funds return perspective, but in terms of where they’re located around the world and the kinds of businesses they’re in,” Windon said.
“It’s about their ability to say, ‘we understand what you guys are and can be a thought partner and help you grow the business and turn left when you should turn left and turn right when you should turn right’, coupled with the Point72 network.”
Image: Dan Cohen and James Windon. Source: Supplied.