San Francisco-based OpenComp secured a $4.6 million seed round at a $30 million valuation as it hopes to help startups get employee compensation right.
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The round was led by TIME Ventures, Ev Williams from Medium and early executives from Dropbox, Salesforce1 and Twitter.
OpenCom’s cloud-based platform is designed to help pre-IPO companies create competitive offers, budget accurately and understand their future cash needs through its proprietary datasets. The platform also aims to ensure equitable pay and representation across categories.
“A lot of tech startups face HR challenges, and the big ones are around compensation,” said co-founder and CEO Thanh Nguyen.
Understanding compensation
More than 580 companies have signed up for the “freemium” cloud-based platform since OpenComp’s soft launch in January, according to the company. It also has secured 35 paying customers, who receive access to added services and consulting from the company.
“Compensation is the most broken part of the startup journey — or at least number two or three,” said Sujay Jaswa, founder and managing partner at investment firm WndrCo and former CFO at Dropbox.
It has only become more broken over the last year, as companies try to figure out pay based on geography with more workforce distribution and remote-first workforces due to the pandemic, Jaswa said.
Expectations of pay also vary from person to person, depending upon whether that potential employee is coming from a large tech company or a small startup, he added.
“Compensation is what people think most about, maybe more than they think about their jobs, “ he said. “But there is no tool for it.”
The future
OpenComp is trying to change that.
Nguyen said the company will use its new funding to deploy more marketing and increase its go-to-market push. The company has seven full-time employees and an offshore engineering department, he said.
The company sees no real competition in the market, Nguyen added. While sites like LinkedIn come up with salary approximations, he said no one has the datasets OpenComp has from its founding teams’ years of experience in the market. As more companies join the platform, that data will only grow, he said.
The company could eventually explore adding public companies as clients, Nguyen said, but the company’s early focus will remain on startups and pre-IPO companies — as compensation issues for such companies only grow.
“This is a utility issue,” he said. “Compensation comes into play much earlier in a company’s lifecycle now. You need to get it done right and early.”
Illustration: Li-Anne Dias.
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