{"id":4292,"date":"2017-03-23T10:58:43","date_gmt":"2017-03-23T10:58:43","guid":{"rendered":"https:\/\/www.rsoftsolution.com\/blog\/lystable-takes-10m-top-up-to-tackle-freelancer-payments.html"},"modified":"2017-03-23T10:58:43","modified_gmt":"2017-03-23T10:58:43","slug":"lystable-takes-10m-top-up-to-tackle-freelancer-payments","status":"publish","type":"post","link":"https:\/\/www.rbsitsoftwaresolution.in\/blog\/lystable-takes-10m-top-up-to-tackle-freelancer-payments.html","title":{"rendered":"Lystable takes $10M top-up to tackle freelancer payments"},"content":{"rendered":"


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Lystable<\/a>, a startup that makes a workflow management\u00a0platform aimed at businesses needing to\u00a0manage\u00a0lots of\u00a0freelancers, has topped up its Series A again \u2014 this time with an additional $10 million, which founder and CEO\u00a0Peter Johnston\u00a0says will be use to fund a change of business model with a payments focus.<\/p>\n

The\u00a0TechStars London incubated and 2015\u00a0Disrupt London battlefield finalist<\/a>\u00a0first\u00a0closed a\u00a0Series A last June<\/a>, taking in $11M at the time, led by Peter Thiel\u2019s Valar Ventures and Goldcrest Capital. Spring Partners also participated; and Max Levchin joined the round\u00a0soon after<\/a>.<\/p>\n

The latest expansion\u00a0round \u2014 which Lystable\u00a0says brings its\u00a0total Series A to $21M, and total raised to date to $25M \u2014 is again led by Thiel\u2019s Valar Ventures. Existing investors Levchin\u2019s SciFi VC (formerly HVF Investments), Kindred Capital and Goldcrest Capital also participated, along with new investors Glynn Capital and Wilmont Ventures.<\/p>\n

So what\u2019s with all Lystable\u2019s\u00a0funding top-ups? In essence this is down to the startup\u00a0trying to\u00a0figure out its market fit, and find out what else it\u00a0needs to build to get there.<\/p>\n

Johnston says the team\u00a0raised much of the earlier Series A off the back of \u201ca couple of big enterprise deals\u201d (Google is a customer, for example) \u2014 and while these\u00a0big checks evidently excited investors, they also turned out to be \u201cmisleading\u201d \u2014 given the core conviction driving Lystable\u00a0is that work will be increasingly unchained from big centralized functions. So trying to sell\u00a0an\u00a0enterprise solution wasn\u2019t where the startup\u00a0felt it needed to be, certainly not at this stage of its\u00a0development.<\/p>\n

\u201cI know the freelancer economy on the corporate side is still pretty new, and still being defined, but after we did those projects we realized we needed to become a team product,\u201d Johnston tells TechCrunch. \u201cWe still maintain those enterprise clients but we didn\u2019t set out with a mission to help big corporations centrally control freelancers. That\u2019s not what the future of work is about. It\u2019s about freedom, and it\u2019s about not having boundaries, and not being held back by crappy HR process and un-smooth onboarding. Anyone should be able to work with whoever they need to get the task done the best way it could be done.\u201d<\/p>\n

So, while\u00a0ultimately Lystable is\u00a0banking on the rise of the gig economy generally fueling demand for its freelance management platform\u00a0\u2014 and even, Johnston reckons, with potential to expand\u00a0into\u00a0sectors such as banking and healthcare down the line, when the market need for overhauled freelancer management software\u00a0becomes more widely established\u00a0\u2014 the platform\u00a0still\u00a0needs to mesh with the\u00a0needs of the\u00a0current users, in\u00a0the media and tech space; aka sectors\u00a0that are more free and open to early adopting new workflow\u00a0tools.<\/p>\n

Hence Lystable quickly making its\u00a0platform free, and now preparing\u00a0to switch to a\u00a0business model that\u2019s centered on building a\u00a0payments solution for companies to more easily remit\u00a0freelancers. This payments piece will be a\u00a0premium add on to what Lystable\u00a0now calls its \u201cfreelancer collaboration app\u201d \u2014 with the plan being to launch a beta at the end of the year. And given\u00a0payments is\u00a0now its\u00a0monetization focus, it\u2019s clear why\u00a0Levchin\u2019s interest is\u00a0piqued. The PayPal co-founder is also now joining Lystable\u2019s board.<\/p>\n

As they went about rethinking the market fit last year, Johnston says the team explored various different business models, including launching a marketplace (privately), and getting \u201ca bunch of freelancers hired by Airbnb and Farfetch\u201d. But\u00a0ultimately, he says, they decided to steer clear of a\u00a0recruitment and\/or marketplace approach \u2014 given how many existing players are already at work in\u00a0that space.<\/p>\n

Instead, the business model pivot hinges on identifying\u00a0an ongoing pain-point that was holding back the smooth running of the freelancer collaboration app \u2014 which he says was\u00a0otherwise effectively plugging into all sorts of business functions and tools, and had been seeing usage \u201cgrowing\u00a0significantly\u201d. So the\u00a0missing premium piece they\u2019re now seeking to bolt on is\u00a0integrating the process for paying\u00a0freelancers.<\/p>\n

\u201cIn the app you manage profiles, you assign work and you track [and can generate] invoices, and you integrate with tonnes of tools at each level. And then what happened was it was being sent off to payroll and the finance departments in these companies,\u201d he explains. \u201cBecause, on the team side of our product, the finance was still being taken care of traditionally, through the finance department, the freelancer experience just broke down. They would never know the status of their invoice, they would never get paid on time, it just felt like \u2014 on both sides \u2014 there was an admin problem.\u201d<\/p>\n

The pain of this problem is not just for the freelancers waiting for and wondering where\u00a0their money is, argues\u00a0Johnston, asserting\u00a0there are also compliance and administration hassles for employers trying to centralize payment of (a growing number of)\u00a0dispersed freelancers via a single finance department.<\/p>\n

\u201cDoes The Economist [another Lystable customer] really want to be paying 1,500 freelancers a month in the same department that they\u2019re paying their full-time staff? Absolutely not,\u201d he argues. \u201cIt\u2019s a compliance nightmare, there\u2019s so many different\u2026 ways you need to do it to be compliant with the IRS. International transfers become another headache. You literally can\u2019t do a direct bank transfer from an American bank into some countries.\u201d<\/p>\n

\u201cMax [Levchin] had gotten more excited about the freelancer economy, and particularly the ability for us to leverage the fact that we build this freelancer workflow tool \u2014 and the position that that could put us in for potentially solving payments admin and compliance admin for both the client and the freelancers,\u201d he adds.<\/p>\n

Lystable launched an early version of the payments product at the end of last year \u2014 to test the idea with a few customers. But now, fueled with additional funding, it\u2019s preparing to cement the switch. As of next month Johnston says the workflow management platform will be freely available to anyone to sign up (currently, while\u00a0free, it\u2019s gated with an invite requirement) \u2014 with the \u201chope\u201d after that being a public beta\u00a0of the payments product launching in December, and a full launch pegged for Q1 2018.<\/p>\n

The question remains how large a market\u00a0Lystable is\u00a0going to find for this premium payments add-on. Johnston concedes that for companies\u00a0managing just a small number of freelancers it will be competing with the relatively low hassle of remitting via the likes of PayPal or Stripe. And\u00a0then for larger entities \u2014 say those handling 1,000 freelancer invoices per month \u2014 it will be facing\u00a0the inertia of traditional business processes and\u00a0the established grip of centralized\u00a0finance departments.<\/p>\n

\u201cIt\u2019s definitely difficult,\u201d he says. \u201cThe early adopters of our payments product are the people that just see the admin nightmare. In the same way when we first brought this new collaboration app to teams that were working with lots of freelancers, we needed the ones that experienced the pain to such an extent that they were willing to say \u2018ok let\u2019s talk about revising our workflow and investing this new workflow through the Lystable app\u2019. And it\u2019s that same thing.\u201d<\/p>\n

\u201cI think the biggest challenge here is you can\u2019t just go and say \u2018hey let\u2019s come and do\u00a0this now\u2019. We have to integrate,\u201d he adds.\u00a0\u201cWe need to have that backwards compatibility with the existing payments and payments systems. And a lot of reasons for the funding is to build much more of a robust payment experience product team around that. Because even if we\u2019re responsible for the autogeneration of lots of forms and handling of\u00a0admin around payments, we will still need to speak to the more dominant, full-time, employer payroll system.\u201d<\/p>\n

Lystable has some 2,200 customers of its freemium product at this point. On the hiring front, the now San Francisco headquartered startup is planning to ramp up from its total headcount of 42 staff currently\u00a0to \u201cprobably\u201d 75 by the end of the year \u2014 including, says Johnston, plans to add additional\u00a0senior execs in the next\u00a0month or so. Doubtless the hoped for two or three \u201cheavyweights\u201d will come with\u00a0plenty of payment experience to help Lystable navigate its next set of integration challenges.<\/p>\n

<\/p>\n

Article source: http:\/\/feedproxy.google.com\/~r\/techcrunchIt\/~3\/0Rg3KR064zs\/<\/p>","protected":false},"excerpt":{"rendered":"

Lystable, a startup that makes a workflow management\u00a0platform aimed at businesses needing to\u00a0manage\u00a0lots of\u00a0freelancers, has topped up its Series A again \u2014 this time with an additional $10 million, which <\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[19],"tags":[25],"class_list":["post-4292","post","type-post","status-publish","format-standard","hentry","category-enterprise-software","tag-enterprise"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t