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Remofirst raises $14.1M to make it cheaper and easier for businesses to hire remote workers worldwide • Technology Flow

Remote work has never been as accepted, or mainstream, as it is today.

Yet some businesses hesitate to explore the option of hiring people in other countries because the prospect can be daunting and expensive.

Nurasyl Serik and Volodymyr Fedoriv launched Remofirst in 2021 to open that option to more businesses with a SaaS offering they say is more cost-effective, faster and comprehensive than what they have now.

Specifically, the startup allows companies to hire people in more than 150 countries without having to set up their own companies. By serving as the employer of record, Remofirst manages the organization to hire businesses on behalf of workers and “manage everything that goes into hiring a person at a company,” Serik said. These include payroll, taxes, employment, compliance and providing work equipment as well as helping businesses come up with competitive compensation plans and offering health, dental and vision insurance.

On paper, the employee signs an employment contract with Remofirst’s local organization and the actual hire. This is 90% of the startup business. It offers contractor solutions, which does the rest of its business, and is currently free, though that may change soon.

Remofist charges businesses a monthly fee starting at $199 and up based on the number of countries. Every country, Seric points out, the cost of operation is different.

“It costs anywhere from $20,000 to $80,00 to set up an entity, and then companies still need to hire accountants, lawyers and HR professionals to maintain relationships,” he told Technology Flow. “You must have x amount in a particular country and abide by all local rules and regulations. That complexity adds to the time it takes.”

In January 2021, the pair raised a $275,000 pre-seed round from angel investors and grew the company to more than seven in revenue in less than 12 months, turning cash flow positive. operation. Although Remofirst focuses mostly on SMBs, the company also works with enterprises and has some Fortune 500 companies among its customers.

“More and more companies are going remote, and some can’t afford it,” Serik said. “We believe we are increasing TAM by allowing more companies to go remote.”

Remofirst differentiates itself from outsourcing by providing an infrastructure that allows startup companies to hire globally, rather than being responsible for finding and managing employees and all the administrative activities associated with it.

Late last year, the startup began the process of raising its seed round of funding. At the time it had five employees and spent zero dollars on marketing.

The process of raising that seed round brought in $14.1 million in capital in a round that closed in February. Mauro Capital and QED Investors co-led the financing, which also included participation from Counterpart Ventures.

Since then, Remofirst – operating in stealth – has grown to 40 employees. As it is focused on growth, it is currently not cash flow positive. However, Serik said the company’s revenue has grown 11-fold year-on-year.

Remofist operates in a crowded space that includes the likes of Deal and Atlas — both of which have raised hundreds of millions in capital. Deal, for example, started with a focus on contractors and is recent Valued at $12 billion. That was last week Collected 200 million dollars In its latest round of funding. Another big player in the space, Remote, recently as removed After that 100 workers Valued at $3 billion In April. But Remofirst is not deterred by its larger competitors, including legacy providers and new startups.

“Current providers are not very technologically savvy and are very expensive,” Seric told Technology Flow. “And some of our competitors raised money when we started. So it’s very difficult for us because there are well-funded companies operating in this space.

To differentiate itself, the company talked to potential customers and kept hearing that cost was a barrier — “There are better solutions out there, but they’re cost prohibitive.”

“So we started with the idea of ​​making sure we could make this service more affordable,” Serik said. “We set out to make sure that this is a viable business and that the unit economics are healthy, but at the same time, we are able to offer prices that are 2x to 3x better than anyone else in the market.” Seric plans to introduce a product later this year that it claims will make its offering more affordable.

Remofist also aims to provide dedicated account managers to all its users. “Going global is a very scary experience,” Serik says. “It’s important to have contact from day one.”

Naturally, Remofirst’s investors are bullish on the company’s potential. “The clarity on this,” Manuel Silva Martinez, general partner at Mauro Capital, told Technology Flow. [Pie Insurance’s] Competitive anticipation and speed of execution stand out in a growing, yet crowded space.”

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

Yusuf Ozdalga, a partner at QED Investors, was drawn to Remofirst after realizing how much his company was able to achieve with “very little” external capital.

“We love that in entrepreneurs,” he told Technology Flow. “They built their product, reached seven figures in revenue, hit breakeven, all with very low levels of funding. Very few companies can accomplish this, and they usually have great product-market fit, great founders, or both.

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