nowsta Secures Funding to Support Hourly Workforces

Nowsta Secures Funding for Hourly Workforce Engagement

Nowsta has successfully obtained venture capital due to its innovative approach to enhancing engagement with hourly employees within the evolving hybrid work landscape.

The company recently announced a $41 million Series B funding round, spearheaded by GreatPoint Ventures. This brings the total funding raised to $59 million.

Investment Details

Alongside GreatPoint Ventures, the financing round included participation from VMG Catalyst, Rally Ventures, Tribe Capital, and existing investors such as Green Visor Capital, Compound Ventures, and Clocktower Technology Ventures.

Company Origins and Inspiration

Nowsta was founded in 2015 by CEO Nick Lillios. He dedicated the subsequent year and a half to developing the technology.

This development stemmed from his experiences working with food service providers in New York. The inherent complexities of managing hourly workforces served as the primary inspiration for the company’s technological solution.

Lillios identified a gap in existing workforce management systems, noting their inability to adapt to the changing dynamics of hourly employment.

A Comprehensive Workforce Solution

Nowsta’s platform, accessible via web and mobile app, integrates essential workforce management tools.

These include automated scheduling, time tracking, payroll processing, and communication features. It also incorporates an on-demand labor marketplace.

This marketplace connects employers with a qualified talent pool sourced through vetted third-party staffing agencies. A built-in wallet feature allows workers to receive payment immediately after each shift and view upcoming earnings.

The On-Demand Workforce and Nowsta’s Marketplace

“Employers are increasingly utilizing contingent workforces and 1099 workers to address staffing needs,” explained Lillios to TechCrunch.

“Our marketplace efficiently connects employers with suitable employees, providing transparency regarding their training and verification status to facilitate rapid decision-making.”

Growth and Adaptation During the Pandemic

The company secured an $8.1 million Series A funding round in April 2019, which fueled the creation of the marketplace.

When the COVID-19 pandemic emerged, Nowsta collaborated with clients facing workforce reductions. The platform enabled them to seamlessly transition employees to alternative job opportunities.

The Future of Hourly Work

Lillios anticipates that the traditional model of hourly work will not be restored.

He believes the changes observed over the past two years will become permanent, driven by employees’ desire for flexibility and employers’ access to adaptive tools and resources.

A Growing Market

The market, once lacking technological innovation, is now experiencing a surge in startups focused on this previously underserved segment.

Recent examples include AskNicely, which raised $32 million for its employee empowerment app.

• Blink provides frontline workers with access to IT services and peer communication.
• Shiftsmart connects shift workers with employers, securing $95 million in funding.
• When I Work, a messaging app, raised $200 million.
• Fountain secured $85 million, and Seasoned obtained $18.7 million for its restaurant worker tool.
• Homebase raised $71 million, and Workiz, focused on home services, raised $13 million.

Nowsta’s Current Impact and Expansion Plans

Currently, Nowsta’s technology manages over 300,000 workers monthly, serving 600 employers.

These include sports venues, hotels, food service companies, and warehouses. During the pandemic recovery, Nowsta successfully sourced hundreds of workers for stadiums and hotels needing to hire around 1,000 employees.

Lillios stated this capability has “revolutionized their businesses and ushered in a new model of flex work.”

The new funding will facilitate expansion into 25 new U.S. markets, doubling the current headcount of 68 by year-end (from 25 in 2021). Investment will also be directed towards product development, sales, and marketing.

While revenue growth in 2021 was substantial, Lillios projects a growth rate of three to five times this year.

Industry Perspective

Ashok Krishnamurthi, managing partner at GreatPoint Ventures, commented: “The labor marketplace has undergone a significant transformation in the last two years, with hourly and flexible work becoming increasingly prevalent.

“Businesses require seamless connectivity and efficient management of their on-demand workforces, and Nowsta provides the most effective solution. We are thrilled to partner with Nick and his team to realize this vision.”