A San Francisco startup that's building employee engagement software for a hybrid work future has raised seed funding and is gearing up to integrate artificial intelligence into its platform.
ChangeEngine raised a total of $5.5 million beginning in late 2021 and closed an extension about a year later. The investment was led by Struck Capital and also included Bonfire Ventures, Builders VC and Forward Partners.
CEO Andrew Higashi co-founded the company in 2021 with Chief Customer Officer Gaurav Saini and Chief Product Officer Kes Thygesen.
They noticed that companies would often get very little engagement from employees on referral programs and even diversity, equity and inclusion initiatives, and realized that part of the problem was a lack of following up.
So they decided to develop software to automate communication around internal programs that are as varied as recruitment, onboarding, layoffs, retention and DEI.
And the issue has been exacerbated by the huge shift to remote work.
"Lots of companies shifted to hybrid and remote," Higashi told me, and "companies are still trying to figure out how to operate in this environment and we're helping them to get there."
ChangeEngine isn't exclusively focused on full-time office workers but also contractors and non-desk workers in industries such as health care. Chief revenue officers are also increasingly looking for better internal communications tools, as well, Higashi said.
To increase employee engagement in workplace programs, it automates internal communication such as sending out reminders and its software can be integrated into common productivity apps like Slack, Teams and Workday.
Later this year, the company will also begin incorporating artificial intelligence into the platform to provide businesses with insights and predictions about their employees. Higashi also told me that he plans on integrating ChatGPT into its internal communications tools.
ChangeEngine caters to midsize businesses and charges them annual subscription fees depending on the number of employees on the platform and specific usage.
The company isn't disclosing the exact number of customers it has, but Higashi told me that it just had a record fourth quarter. He's aiming to reach profitability by 2024.
ChangeEngine currently has about 25 employees and will likely double its workforce over the next year, Higashi said. He's focused on building out the company's customer success and go-to-market teams as well as product and engineering.
Higashi isn't in a rush to hire faster than the company needs, though.
"We didn't take our funding and then try to grow unnaturally," Higashi said. "We've been really, really good at being disciplined in both a growth and down economy and making hires that are essential to the business."
While ChangeEngine has leaned heavily on direct referrals for its own hiring, they posted a recent open role on LinkedIn and got hundreds of applicants.
"I think we're going to be seeing a lot of movement in the talent market this year," Higashi said.
