Hamburg-based Localyze is gearing up to launch in North America in the coming months, with a new round of $35 million in Series B funding announced today, just over a year old. after the disclosure of a $12 million Series A funding.
Series B is led by US venture capital fund General Catalyst. Other investors in the round include Visionaries Club, Web Summit Fund and Frontline Ventures, as well as Job van der Voort (CEO of Remote) and the founding team of Taxdoo.
Localyze’s valuation isn’t disclosed, but we understand it’s a mid-nine-figure sum.
The Y Combinator-backed startup — which was only founded in 2018 — quickly gained traction for a b2b SaaS platform for employers seeking immigration and resettlement logistics support. The startup offers administrative automation and digital case management tools (as well as human support, of course) to facilitate the hiring of international talent or the management of cross-border staff movements.
Targeting the talent war
Localyze says it is responding to the growing demand for increased mobility in the workplace and working abroad among younger generations – and the ever fiercer war for talent suggests that employers who are willing but able to facilitate such moves could stand the chance of gaining ground on less accommodating competitors.
It also indicates that the increase in the number of multinational companies is helping to stimulate the global mobility of employees. While the pandemic effect that gave flexible and remote working a huge boost has certainly lingered – even as some companies try to push back “back to office” mandates.
“I think a lot of companies are trying to find some kind of middle ground right now where they’re not saying you can work in every country in the world,” suggests CEO and co-founder Hanna Asmussen, discussing recent trends in employee mobility. . “What we’ve seen with our customer base is that they try to find common ground where they say these are the ten countries where we have an office or a hub or whatever and then they allow employees to choose one of these.
“Because the work itself is independent of location, it doesn’t matter if you work in your office in Berlin, Madrid or Lisbon, they actually have more and more of these offers where you can actually work temporarily from the abroad where you still have some of the administrative work — especially if you’re not a European citizen. And that’s something we see a lot in Europe and it’s also going to grow around the world because a lot of companies have of course offices [in multiple countries]… So I think actually the middle ground will be an employer who will also provide opportunities for employers to work overseas, which is why I think COVID-19 is actually an acceleration of the trend.
She points to a collaboration she’s had for about a year with Remote, a distributed employee hiring platform (whose CEO is also an investor in this Series B) – which involves Localyze doing some of the Immigration work related to Remote-powered hiring in EMEA.
“It’s super interesting and I think it’s just the biggest proof of how these trends fit together,” she suggests.
Last time we spoke with Localyze, they were reporting over 120 clients. This has now grown more than 3x to over 400, per Asmussen, with revenue also up 6x from last year. During this period, the startup has expanded into 10 markets across Europe.
And while the platform’s early adopters are mostly tech startups — Localyze’s names check the likes of Pleo, Wefox and Remote being among its user roster — Asmussen says it’s succeeded with a marketing push towards “more traditional businesses”. (Although she confirms that adoption is still dominated by tech companies — perhaps saying that around a quarter of customers at this point are “non-tech, non-startup.”)
“We have a ton of companies in the engineering space, plus traditional retail,” she told TechCrunch. “The next step would be more global companies – or European companies that scale to the US or vice versa.
“And then we’re now starting to have conversations with the really big global companies. The plan is really that by 2025 we [will] We have coverage of 50 markets around the world and we have all the global hubs covered and can serve very large companies – because I think that’s where the big volume of employees are moving across the world.
“Long term, I think the talent war is now affecting pretty much every industry, so that’s something for us too now, knowing that the same product is working in other areas also really broadens the targeting that we have,” she adds.
Localyze also aims to expand into Asia, as it aims to integrate global businesses – and also plans to add its first countries in the region in 2023.
“Over the next couple of years we’ll be trying to get as much global expansion as possible – because in terms of customers, usually the next scale of customers, they’re already in at least 10-15 different countries, so I think that the US is already taking us to the next stage, but also targeting early APAC markets – probably from the middle of next year, if all goes well. That would be the plan.
North American launch
In the shorter term, as Localyze gears up for launch in the US (and Canada), Asmussen says two of the three co-founders will be splitting their time between Europe and the US as they work to build one network of local customers on the other. side of the pond for at least the first part of next year – likely based in New York.
The US launch itself doesn’t have a set date yet, but it suggests January 2023 is most likely.
To set the stage there, Localyze recently bought a San Francisco-based human resources company called TruePlan – which sold a workforce planning product – but only for the purpose of boosting its UX and UI intelligence as it seeks to refine the appearance. of its platform for the US market, so part of the Series B funding is dedicated to product development.
“It was kind of a perfect fit in terms of what we needed,” she says of the acquisition. “We knew we now wanted to double down on the product even more – they have amazing engineers and also on the design side.
“I think the US – and US customers – care more about UX and UI than Europe. I think they have a different standard too… So I think there we knew we had to push harder I think about two-thirds of the tenure is on the R&D side and we also have a full US go-to-market team and they’ve been selling to HR – and target group similar to what we would do initially – and so it was kind of a perfect fit.”
“At first it was a bit scary to do this, a week after closing Series B – but right now I’m super glad we did it,” adds Asmussen.
In terms of competition, she says there are regional differences. In Europe, this usually clashes with relocation agencies – which combine relocation and immigration – while in the US, she notes that there is usually more of a divide between these two, but there is also more competition between startups (such as startups focused on resettlement assistance services).
“In the US there have been a few companies – Bridge US, they focus more on the software part of HR and then work with immigration lawyers so they don’t automate the immigration part as much already , which we do,” she suggests — noting that keeping the immigration side in-house is a differentiator for Localyze’s approach.
Another US immigration rival she mentions is LegalPad – which was acquired by Deel this summer, aka the remote hiring unicorn.
While in Europe, she points to veteran Estonia-based startup Jobbatical, which has refocused on offshoring in recent years.
“I think you have to have control over the [immigration] process to ensure a certain quality,” she explains, explaining how she sees her product standing out. “And also, to really scale, you have to invest as much as you can in the product and really try to focus on a product experience – so some of the funding goes to global expansion, but the second big chunk is really for the part product because I think, in the long run, that’s the only way to really differentiate ourselves.
But she agrees the next phase of growth will “definitely” involve more competition – adding: “It will be interesting for us.”
When asked if she saw any reason to worry about post-pandemic “back to office” mandates, she said she wasn’t worried.
“I think everyone will have to find common ground [on remote working]”, she predicts. “Companies that are really strict about this will have some kind of negative impact.