Skip to main content

Sorbet raises $6M Seed led by Viola Ventures to tackle the thorny financials of Paid Time Off

A US/Israeli startup, Sorbet — which is tackling what companies do with the financial risks as employees accrue Paid Time Off (PTO) — has raised $6 million in a Seed funding round led by Viola Ventures, with participation by Global Founders Capital, Meron Capital.

The economics of Paid Time Off is relatively hidden in the business world, but essentially,
Sorbet takes on the burden of this PTO from employers and then allows employees to spend it. This gives the employers far more control over the whole process and the ability to forecast its impact on the business.

Sorbet says that in the US, employees use only 72% PTO balances, even though it’s the most sought-after benefit. But this, effectively, comes out at 768 million unused days off a year, worth around $224 billion. This creates a difficult problem for CFO’s and accountants because its creates balance sheet liabilities on the company’s books, says Sorbet. If the employee doesn’t use all of their PTO, the employer can end up owing them a lot of money which creates a cash flow liability on the company’s books. So Sorbet buys out these PTO liabilities from employees, then loads the cash value of the PTO on prepaid Credit Cards for the employees.

Speaking to me on a call, CEO and cofounder Veetahl Eilat-Raichel, said: “We researched this whole idea of paid time off and found this huge, massive market failure and inefficiency around the way that PTO is constructed. It’s kind of one of those things where, on the face of it, there’s this boring bureaucratic payroll item that turns into a boring balance sheet item. But under it is a $224 billion problem for US businesses… If you think about it, employers are borrowing money from their employees at the worst terms possible and employees aren’t benefitting either. So everyone’s hurting here.”

She said: “Sorbet assumes the liability on ourselves and so then we can allow the company to control their cash flow and decide when they want to pay us back. They gain a lot of financial value because we are able to be very, very attractive on our funding. So it saves costs, it provides them with complete control of their cash flow, and it allows them to give out amazing financial benefits to employees at a time where we can all use some extra cash right now.”

The platform Sorbet has built will, it says, sync with calendars, HR, and payroll systems, identifies habits, and then proactively suggests personalized, pre-approved 3-6 hour “Micro Breaks”, 1-4 day “Micro Vacations” and +1 week Vacations. This, says the startup, increases PTO used by as much as 15%.

Employers can constantly renegotiate the terms of the loan with Sorbet, thus matching future cash flow, insulating themselves against salary raises (wage inflation), and take advantage of other benefits.

The cofounders are Eilat-Raichel, who previously worked at L’Oreal and Lockheed Martin, and a Fintech entrepreneur; Eliaz Shapira, co-founder and CPO; and Rami Kasterstein co-founder and board Member.



from TechCrunch https://ift.tt/2PAiJpE
via IFTTT

Comments

Popular posts from this blog

Max Q: Psyche(d)

In this issue: SpaceX launches NASA asteroid mission, news from Relativity Space and more. © 2023 TechCrunch. All rights reserved. For personal use only. from TechCrunch https://ift.tt/h6Kjrde via IFTTT

Max Q: Anomalous

Hello and welcome back to Max Q! Last week wasn’t the most successful for spaceflight missions. We’ll get into that a bit more below. In this issue: First up, a botched launch from Virgin Orbit… …followed by one from ABL Space Systems News from Rocket Lab, World View and more Virgin Orbit’s botched launch highlights shaky financial future After Virgin Orbit’s launch failure last Monday, during which the mission experienced an  “anomaly” that prevented the rocket from reaching orbit, I went back over the company’s financials — and things aren’t looking good. For Virgin Orbit, this year has likely been completely turned on its head. The company was aiming for three launches this year, but everything will remain grounded until the cause of the anomaly has been identified and resolved. It’s unclear how long that will take, but likely at least three months. Add this delay to Virgin’s dwindling cash reserves and you have a foundation that’s suddenly much shakier than before. ...

What’s Stripe’s deal?

Welcome to  The Interchange ! If you received this in your inbox, thank you for signing up and your vote of confidence. If you’re reading this as a post on our site, sign up  here  so you can receive it directly in the future. Every week, I’ll take a look at the hottest fintech news of the previous week. This will include everything from funding rounds to trends to an analysis of a particular space to hot takes on a particular company or phenomenon. There’s a lot of fintech news out there and it’s my job to stay on top of it — and make sense of it — so you can stay in the know. —  Mary Ann Stripe eyes exit, reportedly tried raising at a lower valuation The big news in fintech this week revolved around payments giant Stripe . On January 26, my Equity Podcast co-host and overall amazingly talented reporter Natasha Mascarenhas and I teamed up to write about how Stripe had set a 12-month deadline for itself to go public, either through a direct listing or by pursuin...