Why We Invested: Remote
September 30, 2022
Covid-19 has dramatically accelerated the trend towards remote work. Companies both large and small were forced to pivot overnight to “work from home.” Organizations were forced to hire and onboard workers without ever meeting them in real life. Despite these challenges, so many companies have operated at an incredibly high level for the past two years, often in a predominantly remote way. This is where Remote comes in.
Covid-19 has dramatically accelerated the trend towards remote work. Companies both large and small were forced to pivot overnight to “work from home.” Organizations were forced to hire and onboard workers without ever meeting them in real life. Despite these challenges, so many companies have operated at an incredibly high level for the past two years, often in a predominantly remote way. This is where Remote comes in. Remote serves as the employer of record (EOR) for organizations, helping them handle all local employment responsibilities, including compliance with local labor laws, payroll, benefits administration, taxes, and stock options.
While talent is globally distributed, opportunities are not. But in a digitally connected world, we now expect opportunities will become more distributed in search of talent – especially after COVID forced the remote work experiment. This trend towards distributed workforces is further accelerated by an exceptionally tight labor market in the U.S., where we see our own portfolio companies gaining comfort with hiring internationally.
However, hiring abroad is a challenge that most companies are ill-equipped to manage on their own. It requires setting up and maintaining a local entity, investing upfront capital, securing a local payroll processor and legal counsel, researching benefits expectations and norms, hiring or training HR staff to answer local employment questions. Remote removes all of this complexity with an elegant software platform and in-house legal, HR, benefits and payroll experts on the ground on every continent. In doing so, Remote has become one of the fastest growing companies we have seen in any sector, winning marquee clients such as DoorDash, GitLab, Hello Fresh, Loom, and many others.
Loom, one of the largest video communications platforms in the world, grew their user base by 900% year-over-year in 2021. They quickly saw a need to access the world’s top talent, with a focus on customer service. With such rapid growth in their user base, Loom did not have the time to set up local entities and evaluate employment structures country-by-country. Instead, Loom selected Remote due to their broad geographic coverage, transparent pricing, and ease of integration. In addition to hiring abroad, Loom also leveraged Remote to convert international contractors to full-time employees, providing competitive benefits, and maintaining an equitable employee experience globally. As a result, Loom has maintained its legendary customer service quality as it’s grown exponentially.
This story illustrates why we are excited to announce our investment in Remote, which is leveraging software and a modern tech-stack to reinvent this process for businesses of all sizes. As we completed our diligence, we were impressed by the sheer demand for Remote’s core product and strong customer feedback. We learned from users that both depth and breadth of geographic coverage are key factors when selecting a provider. Remote’s strategy closely aligns with this, with local entities offering significant depth of knowledge in over 60 countries. This positive feedback is further seen in Remote’s metrics, with best-in-class top-line growth and exceptional net dollar retention.
Remote has significant opportunities for future growth. Remote has a strong land and expand sales motion, often starting with one or two employees before quickly scaling from there. There are also significant opportunities for Remote to expand its feature set. Because payroll is a very high engagement platform for both employers and employees, it’s historically been a distribution center for financial products spanning 401(k) / retirement, insurance, benefits, salary advance, credit solutions, HSA accounts, corporate cards, investments, and potentially other innovative fintech products.
Through our conversations with Remote’s management team, it was clear the company has the right team in place to execute on its strategy and win this enormous market opportunity. Founders Job van der Voort and Marcelo Lebre started Remote with the simple premise that people do their best work when they are free to work where they choose. Fueled by a passion for making global employment accessible for people everywhere, Job previously worked as a neuroscientist before leaving academia to become the VP of product at remote work pioneer GitLab, where he saw the company grow from 5 to 450+ employees. During his time at GitLab, he hired talent from 67 different countries and saw firsthand how difficult it was to build a distributed workforce. Given Job’s prior experience at GitLab and co-founder startup experience at JAXONS, we believe that Job is the right person for the role and are impressed by his vision for the company.
The “Distributed Workforce Economy” is an area we’ve been tracking closely at B Capital as a part of our broader Future of Work thesis. Employer of Record platforms are critical to executing on this thesis. At B Capital, we are strong believers in the importance of diverse teams. Having a distributed workforce allows organizations to achieve just that as companies can hire the talent from anywhere in the world. As we transition out of the pandemic into this new phase of work, we believe that Remote has the best team and strategy to win. We look forward to partnering with Remote in this next phase of growth.