From exploring options to shutter the company to two game-changing funding rounds in nine months, the last two years have been a whirlwind for Denver employee perk startup Zestful.
Founder and CEO Mat Vogels admits that after little traction he was ready to accept failure with the company and close up shop in early 2018.
“We were trying to shut the company down but couldn’t, it was too expensive. We had debt that we had to pay off that we couldn’t afford. So, essentially, we had to keep going,” he said.
And keep going they did, landing $1.1 million in January led by Bessemer Venture Partners, Day One Ventures, Matchstick Ventures and Shrug Capital.
Vogels said the round was oversubscribed and Zestful turned away interested investors as they didn’t need to take on additional capital to prove the validity of the product.
Following the January launch, Zestful has on-boarded more than 100 companies across 14 countries to its perks platform and is back with another major funding play.
The company announced a $5 million seed round on Tuesday led by Thrive Capital, with additional participation by Box Group, Y Combinator, Matchstick Ventures, Third Kind Capital and Shrug Capital.
Vogels said he never anticipated being in this position, considering the dire straits the company faced in the past. With this second influx of capital, he said Zestful won’t go the traditional route of beefing up sales and marketing teams, instead focusing on the product.
“This is not a ‘we’re ready to spend and get going round.’ It’s a really good confirmation for what we’re doing, not only from the investment side, but that we’re comfortable taking that money,” Vogels said. “We can actually focus on building a product that our customers love.”
Zestful allows companies to create the perfect perks and rewards program for their employees, without the reimbursement process. Companies can customize which specific products or categories an employee can spend their benefit dollars on, from Netflix and Spotify, to Uber and gym memberships.
Zestful works with companies big and small, offering customizable options for startups of any size. The company has expanded its perks catalog to over 1,300 options and grown over 80 percent month-over-month with 12 full-time employees, since the January launch.
Vogels said Zestful will look to grow the staff to 20 by year-end, with eyes of doubling by the close of next year. Those hires will primarily be focused on the product and customer-support teams.
Zestful has also announced a new product launch, making it easier for smaller companies to get set up in minutes with popular programs and perk templates. Vogels said the companies can choose from a menu of options that show the top-used programs for a company of a particular size.
The company is also developing a mobile app and various integrations with popular platforms like Zapier and Slack to dole out rewards.
As the company has grown in Denver, Vogels said he’s seeing more capital from the coasts take interest in local startups.
“The exciting thing is that there is more money being put into Colorado, more people on the coasts investing in growth companies here,” he said. “The $5 million we raised here is going to go a long way.”
