Bonusly, a software startup based in Boulder, raised nearly $19 million to continue building out an employee recognition platform that's used by 3,500 companies nationwide.
The Series B financing round totaled $18.9 million. Ankona Capital led the round, with FirstMark Capital, Access Venture Partners and Next Frontier Capital also participating. The round more than doubles the total amount of funding raised by Bonusly since it was founded a decade ago.
Through Bonusly's platform, companies offer their employees a monthly allowance to give small bonuses to their colleagues and recognize their contributions. These points translate to a monetary amount, allowing employees the ability to transfer them into real-world rewards, including gift cards, cash and donations. Employees on the platform receive an average of two detailed recognitions from peers and managers every week.
CEO and co-founder Raphael Crawford-Marks said the latest raise would be used to bolster the software. Bonusly will integrate tools into the platform that will generate insights for companies' leadership teams. For example, with the changes, the platform will have the ability to scour data and offer a supervisor a synopsis of an employee's most significant achievements ahead of a performance review.
"The way we see it, we're in the first inning of building out a suite of people analytics tools that help individuals, that helps managers and helps company leadership better understand their organization and better make decisions that serve their people and the organization's interests," Crawford-Marks told Colorado Inno. "We can help leaders take a more macro view of their workforce."
Well-known brands, such as Chobani, ZipRecruiter, Hulu, Headspace and SurveyMonkey use Bonusly. The company has grown its clientele from the 1,700 it was working with when it raised its Series A round in 2020.
Crawford-Marks said Bonusly's clients span industries, geographies and sizes, ranging from 10-person startups to companies with thousands of employees. Many of the users are in the technology industry, where salaries are higher, and therefore turnover is more expensive, he said.
"That said, we also have gained significant traction in a number of other industries that are honestly surprising, even to me," Crawford-Marks said. "We've got significant concentrations of customers in manufacturing, food service, hospitality, retail and even veterinary and health care."
Those industries are experiencing common problems: high turnover rates or high rates of unfilled jobs. Some of these companies are "feeling acute pain" with attracting and retaining talent, and they're looking to Bonusly to ease it, Crawford-Marks said.
A "Stress in the Workplace" survey by the American Psychological Association found that employees who felt valued at work were more motivated and engaged and less likely to look for a new job. Many companies still treat employees like "coin-operated machines," in which they get a salary, and in return, they lend their work, Crawford-Marks said. Over the past decade of running Bonusly, he's witnessed a slow shift toward companies understanding the benefits of recognizing their workers.
"When I was working on Bonusly as a side project, I had [vice presidents] of HR laugh on the phone at the idea that it would be a good idea to empower employees to give each other recognition," Crawford-Marks said. "That idea is no longer laughable, and some of those same VPs have actually come back and are now customers. Clearly, progress has been made, but I think that progress has been from 1% of companies to maybe 5% or 10%."
Crawford-Marks argues that Bonusly's platform is even more pertinent with the wave of mass layoffs experienced by the technology industry over the last several months. The platform offers a cost-effective method for companies to retain employees in a time when they aren't raising salaries, he said. Insights taken from the platform could also be used by companies to make decisions about layoffs.
"When companies do layoffs, they're not just deciding who to let go. They're also deciding who they need to keep to help them navigate these turbulent times," Crawford-Marks said. "It's really critical to retain those key performers."
In addition to building out its platform, Bonusly will use the funding to invest in sales and marketing. Crawford-Marks said he doesn't have any immediate plans to hire additional staff.
