Thrive Capital and Index Ventures Invest in Justworks’ Next-Generation PEO Platform

NEW YORK, Oct. 10, 2014 /PRNewswire/ -- Justworks, the NYC-based startup providing one of the industry's best payroll, benefits, and compliance platforms, announced today that it has raised $6 million in Series A funding led by Thrive Capital—investors behind Instagram, Spotify, and Warby Parker—with additional participation from Index Ventures—investors in Dropbox, Skype, and SoundCloud. Today's announcement brings Justworks' total funding to $7 million, following an initial seed round of $1 million received in October 2013 from Index Ventures.

This investment underscores a significant shift in the existing payments and benefits ecosystem, with Justworks being the industry's first technology-based "co-employment" (more commonly known as a PEO) company—which allows growing businesses to band together to secure the same low-cost benefits that larger companies enjoy—in the market today. The company will use the funding to scale their platform, build out their core technology offerings, enter new markets, and further develop their operations and support infrastructure to meet increasing demand. The company also announced that Will Gaybrick, general partner at Thrive, will join its board.

"Justworks is a leader in helping businesses streamline their payroll, benefits, and compliance needs—freeing them to focus on what they do best," said Gaybrick. "There's a lot of buzz in the HR space—from established incumbents to new startups—but Isaac and Justworks stand out by providing a differentiated model to offer payroll and benefits. It takes a rare set of skills to build a company like this, but we've been watching this top-caliber team for a while now, and they know how to make it happen."

Justworks is currently available in 43 states, with plans to expand to the rest of the country by year's end. Their unique pricing model is one reason that customers have found its offerings so attractive. The free "Starter" package allows customers to manage 1099 filing, expense reimbursements, and contractor payments. Also available is Justworks' "Premier" package, offered at $75 per month per employee, that provides the company's full suite of benefits, including 401(k), HR Concierge, and workers' comp coverage. Justworks currently has over 2,000 companies using its platform.

By combining employees under one Employer Identification Number (EIN), many customers are already saving money through lower-cost benefits including medical, dental, and vision. Starting in Q4 of this year, the company will offer a health insurance benefits package that represents an industry first.

"Justworks has been an invaluable partner in freeing up our team to focus on building our business," said Philip Krim, CEO of Casper Sleep, a vertically integrated mattress company based in New York. "We've already started to leverage the tremendous savings offered through their platform, and we look forward to taking advantage of their health insurance benefits going forward."

With a highly engaged customer service team, Justworks works with businesses in a wide variety of industries, including accounting, media and technology, and professional services. Companies looking to outsource their payroll and benefits can sign up and be up and running in a matter of minutes.

"We created Justworks with one mission in mind: to save businesses both time and money by providing a world-class technology platform to handle all of their payroll, benefits, and compliance needs," said Isaac Oates, CEO of Justworks, formerly of Amazon and Etsy. "Every year the employment landscape is growing more complex, most recently with the Affordable Care Act. The reaction we're seeing from the marketplace—our revenue has surged by 14X since the beginning of 2014— is a testament to the appeal of what we are trying to achieve. Today's vote of confidence from both Thrive and Index gives us the institutional support from firms with strong track records of success to continue this rapid growth."

About Justworks

As entrepreneurs ourselves, we understand how cumbersome taking care of payroll, benefits and governmental compliance requirements can be. We started Justworks to make it easy and affordable for businesses to hire and take care of people—freeing them to invest their time in what matters: building their company. Our all-in-one dashboard makes it easy for you and your team to use, and our growing network of businesses means you get the best rates on health insurance and other essentials. You might even forget you ever worried about this, because with us, it just works. Learn more at www.justworks.com.

Contact

Michael CecilAccount Manager, Thunder11
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SOURCE Justworks