Fountain Raises $85M to Help Companies Hire Hourly Workers

The Impact of "The Great Resignation" on Hourly Worker Recruitment

In recent months, many quick-service restaurants and retail establishments have adjusted their operating hours, sometimes posting signs indicating reduced schedules or temporary closures.

This trend, widely referred to as “The Great Resignation,” signifies a substantial departure of hourly workers and has subsequently intensified competition for available talent. As a result, companies such as Costco are increasing their minimum wage to $17 per hour, while Starbucks has announced a rise to $23 per hour.

Challenges in the Current Hourly Worker Landscape

“The current environment presents unprecedented challenges for those involved with hourly workers,” stated Sean Behr, CEO of Fountain, in an interview with TechCrunch. “Initial expectations were that hiring would return to normal following the COVID-19 pandemic, but this has proven incorrect.”

Several factors contribute to these difficulties. Beyond compensation, Behr highlighted evolving application trends. Currently, approximately 80% of job seekers utilize mobile devices, enabling them to apply for numerous positions simultaneously. Furthermore, hourly workers now have a wider range of employment options, including ride-sharing, food delivery services, and positions at distribution centers.

This expanded landscape has fostered a competitive environment, with many hourly workers recognizing that positions offering low wages, such as those paying $8 an hour for burrito preparation, or those involving health risks for $13 an hour, are no longer appealing.

Behr acknowledges that there isn’t a single, simple solution to these issues, contributing to a situation where most companies are receiving fewer job applications compared to the previous year.

Fountain's Solution for Streamlined Hiring

This is where Fountain steps in. The company, operating on a remote-first model, offers an applicant tracking system specifically designed for the 82 million hourly workers in the United States.

Fountain specializes in high-volume hiring, defined as filling over 1,000 positions or receiving that many applications per position within a short timeframe. The platform also reduces the average time to hire to 8.70 days, a significant improvement over the industry average of 36 days, according to Behr.

Having collaborated with over 250 clients, including Chipotle Mexican Grill and Liveops, Fountain has processed over 16 million applications in the last year and facilitated the hiring of more than 2 million individuals in 2021.

This growth translated into a 220% year-over-year revenue increase in 2021, attracting attention from investors, notably SoftBank’s Vision Fund 2, which led Fountain’s $85 million Series C funding round. The company received seven investment offers, ultimately choosing SoftBank as a strategic global expansion partner, Behr explained.

Investor Perspective on Fountain

Andrew Zloto, Director at SoftBank Investment Advisers, stated via email that SoftBank was impressed by Fountain’s focus on the needs of the modern workforce. The platform assists employers in quickly identifying suitable candidates while simultaneously helping employees find desirable jobs efficiently.

“The gig economy has fundamentally altered the sourcing and hiring of hourly workers, shortening the hiring and onboarding process from weeks to days,” Zloto added. “Fountain provides essential tools for companies to adapt and compete in this new environment by simplifying, optimizing, and automating the candidate journey to reduce time-to-hire. We believe their partnerships with major employers like Chipotle and Liveops demonstrate the platform’s innovation and effectiveness.”

Funding and Future Plans

The investment round also included participation from B Capital Group, Mirae Investment, and existing investors such as DCM, Origin Ventures, Commerce Ventures, Semper Virens, and Uncork Capital. This latest funding brings Fountain’s total investment to $119 million, building on a $23 million Series B round raised in 2019.

Behr plans to allocate the new funds towards expanding the team, particularly in sales, engineering, and marketing. Fountain also intends to invest significantly in international market expansion, currently operating in 77 countries, with a focus on Asia, Europe, and the U.K.

Competition and Differentiation

Fountain is among several companies receiving investment for tools supporting hourly workers. Workstream, for example, recently secured $48 million in Series B funding for its text-based recruitment approach, and Bite Ninja received pre-seed funding for software enabling remote drive-thru shifts.

Behr differentiates Fountain by emphasizing its holistic approach, matching job characteristics to the preferences of job seekers, rather than focusing on specific vertical niches like restaurants or trucking.

“We’ve challenged the industry’s tendency to apply knowledge worker-focused solutions to hourly workers, recognizing that this approach is ineffective,” he concluded. “We focus on connecting employers with the right candidates – individuals comfortable with roles in environments like cold warehouses or early morning shifts.”