Australian human resources and payroll technology start-up Flare has closed a major $21 million funding round, led by Point72 Ventures, the New York-based venture capital firm founded by well-known hedge fund manager Steven Cohen.
The business, which was co-founded by Dan Cohen, James Windon, Jan Pacas, Colin Mierowsky and Saul Kaplan in 2015, provides software that manages the on-boarding of new employees, other human resources functions and payroll.
It has previously been supported by local Westpac-backed venture fund Reinventure, and Point72 partner Pete Casella will now join its board.
Unlike other local start-ups, which have raised significant funding from overseas, Flare has focused on domestic growth, rather than trumpeting the often used start-up maxim of “going global from day one”.
Point72 has previously invested in companies including low-volume electronics manufacturer Tempo Automation, investment app Acorns and DriveWealth, a fintech start-up that offers free stock trading. Mr Casella said he liked the way Flare had reimagined the role the workplace could have in an employee’s financial life.
In addition to the HR functions, Flare aims to help employees become more engaged with their superannuation and “financial wellbeing” by giving information and advice, as well as providing a corporate discounts portal on everything from fashion to entertainment.
“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,” Mr Casella said.
Dan Cohen said Flare’s local focus was based on a belief that, given the limited resources available to a start-up, it was best to “go all in on a market”.
“Our focus over the next few years is solely on this market and we want to be the dominant player in the space,” Mr Cohen said.
“From our personal perspective, most companies here are forced to go global because of the market size rather than choosing to. If you do that, you better have deep pockets to support it and secondly, the playbook needs to be mature.”
In the last year Flare has grown from 100 to 200 corporate clients including Sephora, Knight Frank, General Pants Co and PeopleBank.
The bulk of the capital raised will be used to hire staff, as Flare aims to double its headcount in the next 12 months.
“What we firmly believe is there has been a significant shift in the dynamic between employees and employers in Australia in the last five to 10 years,” Mr Windon said.
“There are changing expectations from employees about what an employer delivers to them and it’s more than just a pay cheque. Employees are now looking for guidance on building their own careers … and there’s also an expectation that they want to live financially well.”