Workforce management startup WorkHound has announced the close of a $1.5 million seed funding round. The four-year-old company will be using the capital to scale growth of their anonymous feedback product that allows frontline employees to share feedback instantly with employers.
The Chattanooga-based WorkHound was founded by CEO Max Farrell and CTO Andrew Kirpalani to improve the high turnover rates within industries that have large numbers of distributed employees — beginning with trucking, logistics, and supply chain workers.
Trucking, for example, sees a roughly 95 percent annual driver turnover rate.
“Across these industries with desk-less workers — the frontline workforce that represents one in five American workers — avoidable turnover is high,” Farrell tells Hypepotamus. “A significant portion of this turnover is happening because these workers don’t feel respected; they don’t feel like they have a voice.”
“Up until now, the only options a worker had to share these feelings was an exit interview, which we feel is an autopsy, or an annual survey, which just isn’t fast enough.”
WorkHound has created a platform that sends these frontline employees a text message with a link to a 90-second survey that allows them to immediately and anonymously submit feedback on any issue company management wants to assess.
On the backend, WorkHound uses keywords and sentiment analysis to provide the company with aggregated intelligence garnered from these surveys.
If an employee wants a problem addressed immediately, they can choose to remove the anonymity element and send management information on their issue.
WorkHound is currently service 20,000 frontline employees across the country. Their average customer has about 400 employees, though they also serve large public enterprises such as Marten Transport and CRST International.
The first institutional capital the company raised was roughly $600,000 of pre-seed money in 2016. That was from Dynamo, a logistics-focused VC firm local to Chattanooga, as well as West Coast-based Right Side Capital Management.
Right Side Capital came back to lead this recent seed round, which also saw participation from Comeback Capital, SaaS Venture Capital, South Street Capital and SpringTime Ventures.
The high VC interest is a result of the 20x growth in MRR and ARR that the startup has seen since its 2016 raise, according to Farrell.
Now, the company will focus on growing its team across development, marketing, sales and customer service. The current headcount of a dozen will swell to 25-30 by year-end.
They’re also planning to go after new industries, says Farrell. Namely, non-hospital healthcare is of high interest to the team, followed by hospitality, manufacturing, and others.
“We believe the WorkHound product is relevant to any industry that has high-skilled employees in high turnover positions,” said David Lambert, Right Side Capital Managing Director, in a statement.
Hiring will take place in both the company’s Chattanooga and Des Moines, Iowa offices. Farrell says the supply chain expertise concentrated in Chattanooga, also known as “Freight Alley” by industry insiders, has been instrumental to their growth.
“We believe that the smartest mid-sized cities are building around a thesis,” he says. “Chattanooga can’t compete in everything. When the city says, we’re putting all our chips on a thesis around supply chain and logistics, that’s something that a company like WorkHound can build on.”
WorkHound’s investors demonstrated enthusiasm for this thesis as well, he says.
“They were delighted that we’re building in the middle of the country; they saw the strategic network that sits in the middle of the map.”
Photos via WorkHound