Remofirst raises $14.1 million to make it cheaper and easier for companies to hire remote workers worldwide • TechCrunch

Telecommuting has never been more acceptable or mainstream than it is today.

However, some businesses hesitate to hire people from other countries because the prospect can be scary and expensive.

Nurasyl Serik and Volodymyr Fedoriv started Remofirst in 2021 to open up this option to more companies with a SaaS offering that they say is more cost-effective, faster and comprehensive than what currently exists.

In particular, the startup allows companies to hire people in more than 150 countries without having to create their own organizations. Acting as an official employer, Remofirst manages this organization to recruit on behalf of companies and handle “everything related to hiring a person for a company,” Serik said. This includes managing payroll, taxes, employment, compliance and work equipment, as well as helping businesses develop competitive compensation plans and offering health, dental and vision insurance.

On paper, the employee signs an employment contract with the local Remofirst organization, not with actual employment. This is about 90% of the startup’s business. It offers a solution for contractors, which makes up the rest of its business and is currently free, although that may change soon.

Remofirst charges companies a monthly fee of $199 and up, depending on quantity and countries. Each country, Serik notes, has a different operating cost.

“It costs between $20,000 and $80,000 to set up a legal entity, and then companies still need to hire accountants, lawyers and HR professionals to maintain the relationship,” he told TechCrunch. “You need to have x amount of money in a specific country and follow all local rules and regulations. This complexity adds time.”

The pair raised a $275,000 pre-seed round from angel investors in January 2021, and then managed to grow the company to more than seven figures in revenue, achieving positive cash flow — with no customer churn — in less than 12 months. operation. Although Remofirst mostly focuses on small and medium-sized businesses, the company also works with enterprises and includes some Fortune 500 companies among its clients.

“More and more companies are moving to telecommuting, and some can’t afford it,” Serik said. “We believe we are increasing TAM by enabling more companies to work remotely.”

Remofirst differentiates itself from outsourcing by saying that instead of being responsible for finding and managing employees and all the admin work that goes with it, the startup provides the infrastructure that allows companies to hire workers around the world.

At the end of last year, the startup began the process of attracting initial funding. At the time, the company had five employees and spent zero dollars on marketing.

The fundraising process for this seed round raised $14.1 million in capital during the round, which closed in February. Mouro Capital and QED Investors co-led the financing, which included participation from Counterpart Ventures.

Since then, Remofirst, which operates in stealth mode, has grown to 40 employees. Because it is focused on growth, it is no longer cash flow positive. However, Serik says that the company’s revenue has increased 11 times compared to last year.

Remofirst operates in an increasingly crowded space that includes companies like Deel and Atlas — both of which have raised hundreds of millions in capital. Deel, for example, started with an emphasis on contractors and was very recent estimated at 12 billion dollars. Last week’s atlas raised $200 million in the latest round of funding. Another big player in the space, Remote, recently released 100 workers after the building estimated at 3 billion dollars in April. But Remofirst is undeterred by its larger competitors, including legacy vendors and new startups.

“The incumbent vendors are not very tech-savvy and very expensive,” Serik told TechCrunch. “And when we started, some of our competitors raised a lot of money. So it was quite difficult for us, because there were very well-funded companies working in space.”

To differentiate itself, the company talked to potential customers and kept hearing that cost was an obstacle — that “there are good solutions out there, but they’re prohibitively expensive.”

“So we started with the idea of ​​making this service more accessible,” Serik said. “We decided to make sure it was a viable business and a healthy unit economy, but at the same time we would be able to offer prices that were 2-3 times better than anyone else in the market.” Later this year, it plans to offer a product that Serik says will make its offering even more affordable.

Remofirst also aims to offer dedicated account managers to all of its clients. “Going international is a terrifying experience,” Serik said. “It’s very important to have that point of contact from day one.”

Of course, Remofirst’s investors positively assess the company’s potential. Manuel Silva Martinez, general partner at Mouro Capital, told TechCrunch that “clarity [Remofirst’s] competitive pricing and speed of execution stood out in a growing but crowded space.”

He added: “Remofirst stands out for its ability to apply digital overlay to real-world problems in an easy way.”

QED Investors partner Yusuf Özdalga said his firm was drawn to Remofirst after learning how much it was able to achieve with “very little” outside capital.

“We love that about founders,” he told TechCrunch. “They built their product, grew to over seven-figure revenue, broke even, all with very minimal funding. Very few companies can pull this off, and those that do usually have great product-market fit, great founders, or both.”

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