I’m delighted to announce a new addition to our portfolio: YouEarnedIt, an Austin-based SaaS HR company that helps drive employee engagement and company performance metrics. IDG Ventures co-led the $6.5M Series A round with Silverton Partners.
We often get asked what we look for in our investments. In many ways YouEarnedIt perfectly exemplifies our investment criteria: Series A, founder-led team, capital efficient, technology solving a real problem with a SaaS model, large and growing market, and great co-investor.
Let me elaborate:
YouEarnedIt was created three years ago as an ‘initiative’ to address a very specific business goal for digital marketing agency Rockfish Interactive: to increase employee engagement and satisfaction. The resulting product––a recognition and rewards program driven by peer-to-peer recommendations––was a huge success for the Rockfish team. What’s more, a viable and effective employee recognition platform was born.
Almost 90% of enterprises have some version of an employee recognition program, i.e., most enterprises have budget reserved for these programs, which we venture capitalists love. These programs are most commonly based on above-and-beyond performance, peer-to-peer recommendations, length of service, and other specific behaviors. And there’s a solid reason why enterprises are investing in employee recognition programs: research shows that companies with higher employee satisfaction outperform competitors by 2.3 percent to 3.8 percent per year. Other studies demonstrate that clear goal-setting and the belief that a company is invested in employees’ individual growth have a dramatic effect on workplace motivation.
The research resonates with our own philosophical belief that a happy, rewarding workplace makes for a more successful business.
According to IDC, the Talent Management Applications market is over $4 billion a year, and the overall HR Tech market is almost $12 billion. So there’s a lot of money spent by enterprises, big and small, on software solutions. We got excited about YouEarnedIt after an introduction by Silverton Partners’ Mike Dodd, a savvy SaaS operator and investor whom we’ve known for a long time.
But what really sealed the deal for us was the team. YouEarnedIt is led by co-founder and CEO Autumn Manning, who is bright, super hard-working, driven, and passionate about the business of enabling people to perform their best. She is supported by standouts Jon Driscoll, chief revenue officer, and Kevin Dasch, chief operating officer. Autumn and her team have been incredibly capital efficient, using seed capital from Kenny Tomlin (CEO of Rockfish) and other angels to scale to over 300 customers, including Anheuser-Busch, Condé Nast, Dell, Kaiser Permanente, Pandora, Sony, Turner, Whole Foods, and dozens of smaller companies. This impressive customer roster is a rare exception to our typical early-stage investments in which we expect to see only a few customers. Even more impressive is the fact that YouEarnedIt has driven 80% employee engagement on a regular basis across all their customers.
I’m thrilled to work with Autumn and the entire YouEarnedIt team.