Revolutionizing Workers’ Comp Insurance
Hourly.io is a new investment by Glilot+, Glilot Capital’s early growth fund. The company, operating in the spaces of payroll management and insurtech, today announced $27M in Series A funding, led by Glilot, after launching its innovative platform for organizations employing mobile and hourly workers in mid-2021.
Payroll and workers’ comp insurance at a click of a button
Tom Sagi, the CEO and co-founder of Hourly, experienced the problems of employing hourly workers first-hand: he had a construction company that hired employees for a variety of changing situations. Its employees would change their shifts’ time, place, and schedule on an hourly basis. As employers, managing paychecks and workers’ compensation insurance (aka: “workers’ comp”) was a very tedious manual task, done through legacy solutions that proved inadequate for both employers and employees.
To put things in context – hourly workers represent over 50% of the American workforce, operating in sectors such as food service, construction, deliveries, and transportation. So realizing his pain was pervasive across sectors, Tom founded Hourly with experienced CTO Shay Litvak as his co-founder, to build a robust solution that caters to small and mid-sized businesses that employ mobile and hourly workers. The basis of the idea was very simple: if every employee owned a smartphone, they could easily report their work hours and daily tasks, enabling their employers to pay them easily, quickly and digitally.
The Hourly team didn’t stop there, and took its solution to the next level. On top of their payment platform, Hourly developed a complementary workers’ comp insurance solution that helps with risk assessment, underwriting, and claims. Today, workers’ comp risk assessments that set annual premiums are estimated at the beginning of the policy year, usually based on not much more than guesswork given the dynamic nature of hourly businesses. The result is overpayment or underpayment of coverage and a consequent painful year-end audit process by insurers, that both employers,insurers, and agents suffer from. However, when your organization has a digital payroll platform that is tightly connected to your worker’s comp estimates, insurance policies can be right-sized in real time and the transparency eliminates the need for any audit. All gain, no pain.
Why Glilot? Why Now?
We at Glilot believe that the insurance industry is still largely ripe for disruption by technology, but we particularly love insurtech businesses that innovate not only on the distribution front but also on product, risk assessment and claims management. We also believe that this is where Glilot+, Glilot’s early growth fund that specializes in taking early-scale companies through their leap, could have a significant impact based on our insurtech and SaaS expertise.
With Hourly, we saw an insurtech leader in the making poised to disrupt the $50 billion workers’ comp insurance market, and were eager to join their journey as they began their rapid scaling. Hourly spent great efforts to offer a combined solution that creates a virtuous cycle between their payroll and workers’ comp offerings, both powerful products in their own right. A true 1+1=5 value proposition to businesses, evidenced by Hourly’s ability to attract top management talent to their ranks over the past year.
Since launching in mid-2021, Hourly has seen significant growth not only in either product’s sales, but also in the attach-rate between both offerings, as more customers have opted to use Hourly’s payroll solution following buying their workers’ comp policy, and vice versa. It is not surprising that in the past year they sold over $10 million in premiums and signed several major agreements with insurance giants (stay tuned for announcements and get your live updates here). The market is clearly craving for solutions like Hourly’s, and we expect them to become a major worker’s comp and payroll player in the US, starting in California and spreading into several other states in the next 18 months.
Hourly has developed impressive assets and has done an amazing job at finding the right product-market fit – exactly the kind of startups we look to work with at Glilot+. As they are about to scale, we are excited to lead the Series A round alongside such experienced investors as S Capital and Vintage, and look forward to supporting them on their growth journey.