Two weeks into the new year, Australia has its first big capital raise announcement, with staff management startup Deputy raising US$25 million ($33 million) in funding from Boston-based venture capital firm OpenView.
Founded in Sydney eight years ago, this is the first external funding for Deputy, which looks to help businesses with staff paid by the hour save time by simplifying tasks including scheduling, time-sheets, tasking, employee time tracking, performance management, and communication.
The startup, founded by Steve Shelley and Ashik Ahmed, counts the likes of Amazon, Qantas, and NASA among its 28,000-strong customer base – up from around 10,000 when Startup Daily profiled Deputy last February.
Though it has customers in over 70 countries, the bulk of Deputy’s growth is coming from the US, where a 2012 Labor Department report found three in five workers are paid on an hourly basis. As such, the funding will be focused on further expanding Deputy’s reach in the US, as well as the development of new features.
This emphasis on the US informed Shelley and Ahmed’s fundraising process; while they did explore a few options with Australian VCs, Shelley said the local search was “very lightweight”.
“We decided that, between the appetite for a business of our potential, the fact that US investors probably understand our space better than local ones, and our expansion being focused on the US, we should look offshore,” Shelley said.
For OpenView, a firm focused on investing in and working with expansion-stage software companies targeting the North American market, the investment in Deputy is the single largest it has made.
In conjunction with the funding, OpenView managing partner Daniel Demmer will join the startup’s board.
Though the cofounders said they were approached by 10 VCs for each one they approached, the decision to go with OpenView came easy.
“I feel it was a complete cultural fit; from the style of their team to the fact they focus so heavily on expansion and offer an expansion team, their personality and understanding of our culture, and more importantly the understanding of our product and the market fit…it was almost like they had been a part of our business from the very start,” Shelley said.
OpenView likes to work hands-on with its portfolio companies, with its Expansion Platform geared towards helping its startups hire talent, acquire and retain customers, and partner with industry leaders.
“Other investors we approached had no idea what the hourly paid market actually stands for, despite the fact that 60 percent of the workforce is in the hourly paid market. People in the Valley can live in a bubble, but OpenView truly understands our value proposition and how we solve the pain points,” Ahmed said.
“They did quite a lot of due diligence on deputy to the point that they called our customers. They went the distance in understanding our strengths, weaknesses, and the opportunities. We feel we’re truly getting a team that cares and understands us and our customers, not just the funding.”
As well as expanding its Sydney and US offices, Deputy will be growing its teams in the UK and the Philippines to further its reach across Asia and Europe.
Image: Ashik Ahmed and Steve Shelley. Source: Supplied.