Encinitas-based benefit automation tech platform Payroll Integrations has raised $20 million in its Series A funding round, led by Arthur Ventures. The Minneapolis growth equity firms specializes in in B2B software.
“We’re going to continue to invest in our product development to expand our product line as well as invest in our operations to meet the needs of the companies adopting our technology,” Payroll Integrations CEO Doug Sabella told the Business Journal. “We’re also going to bolster our relationships with payroll and benefit providers–we currently work with 70% of the payroll market and 90% of the largest 401K providers. We plan to continue to penetrate further into the benefits market.”
For the company, the funding marks a major vote of confidence in its capabilities and validation of its technology. “We have been able to sign enterprise contracts with a number of large and well-known companies, and Arthur Ventures’ investment signifies their belief in our staff and growth trajectory,” he added.
Arthur Ventures has raised more than $1.1 billion and carries an extensive portfolio that includes benefit companies like Everything Benefits, VBA Software and When I Work.
“Payroll Integrations is well-positioned as the go-to solution to reduce the administrative burden on employers and recordkeepers, whether for retirement plans, HSA plans, or other employer-sponsored benefit plans,” said Ryan Kruizenga, General Partner at Arthur Ventures.
Sabella said Payroll Integrations has increased its revenue by 2.5 times in 2022 and is on track to have that same growth in 2023. “Over 2,500 employers have already signed up for our platform this year, which is nearly double the number of employers that signed up last year,” he added.
According to a 2023 Bank of America report, 96% of employers feels responsible for the financial wellness of their employees. Although many of them have introduced new financial wellness offerings and expanded employees’ benefit options, these additions sometimes come with complex and time-intensive administrative work, since there’s still a heavy reliance in legacy processes that require spreadsheets and manual file uploads.
To combat the setbacks, Payroll Integrations says its platform links payroll providers and benefit platforms to establish a direct two-way connection. Using its technology, the platform reportedly captures employee census and payroll data directly from the payroll companies, extracts relevant information and converts the data into a simplified format for clients.
The company says it now partners with more than 4,000 companies to connect payroll with retirement, HSA and other employer-sponsored benefit plans for more than a million employees. San Diego’s Sequoia Biotech is using its platform. It’s also connected to big names in the payroll sector like ADP, Paychex and Quickbooks Online. Payroll also reports that it’s working with 90% of the largest 401k providers, including Empower, Transamerica, Principal, Voya and John Hancock.
Sabella said the company is currently looking to bring expanded benefits to its platform, like insurance benefits, student loan repayments. “We’re also building out a platform for third-party administrators so they can ensure employers will more easily stay in compliance with the U.S. Department of Labor and Internal Revenue Service regulations,” he added.
The near future looks bright. Payroll Integrations believes that in the next five years, it’ll increase 10-fold in size, while solidifying its name as being a ubiquitous and trusted name in the benefits and payroll connectivity space.
FOUNDER & CEO: Doug Sabella
NOTABLE: The company reached a milestone of processing one million employee benefits among 4,000+ companies.