VCs Funding More Tools For Frontline Workers

If your job or business requires showing up in person, then VCs have a few startups that might be of interest.

That was one core finding from our latest analysis around funding for companies developing tools for employers and jobseekers.

A deeper dive into the numbers shows startups targeting frontline workers in industries such as healthcare, construction and retail comprised one of the larger investment themes. This translates into both deal flow and big checks. To illustrate, we used Crunchbase data to put together a list of 14 recently funded 1 companies in this area.

Healthcare in the lead

Investment recipients include a mix of industry-specific and more general purpose offerings. But among sector-focused startups, healthcare stood as a favored area.

This makes sense given the sector’s longstanding status as a growth industry. Even amid the rather bleak U.S. August jobs report, healthcare was one of the few areas that saw measurable gains. It seems the nursing shortage is not going away.

Two of the largest funding recipients on our list — ShiftMed and Nomad Health — are tackling this predominantly in-person profession with different aims. McLean, Virginia-based ShiftMed has raised over $315 million to date for a platform helping employers bring local per diem nurses on board and tackle understaffing with AI-enabled scheduling tools.

New York-based Nomad Health, on the other hand, offers a platform for travel nurses to find jobs. The decade-old company has raised over $240 million in funding to date.

Construction, industrial and customer-facing businesses

Developers of employer tools for other industries are also generating enthusiasm with investors.

In the construction space, for instance, San Francisco-based Miter is looking to build up its user base with $23 million in Series A funding this spring led by Bessemer Venture Partners and Coatue. The 4-year-old company offers a single platform for contractors to manage payroll, HR, expenses and field operations.

In some ways, the startup fits in the category that Bessemer partner Kent Bennett, who led the firm’s investment in Miter, calls “business in a box” companies. These are essentially platforms that business owners can use to handle administrative tasks and free up time to concentrate on their core offerings.

“So much of that is language-based work,” Bennett said, regarding the peripheral demands of running a business, and so can see remarkable efficiency gains with the rise of AI-enabled language models.

Several others have raised rounds for tools targeting the manufacturing space, including San Francisco-based Datch and Paris-based Fabriq. In the hospitality industry, meanwhile, Paris-based Extracadabra raised a fresh fund this spring for a platform targeting hospitality industry employers.

Where the jobs are

For frontline work-related startups, it helps that this category encompasses most jobs. While remote work may seem widespread, nearly three-fourths of employed Americans still go to their workplace on a typical workday. Typically, frontline jobs are either difficult, impractical or flat-out impossible to carry out remotely.

Moreover, these are commonly sectors like healthcare, building and home services, that have shown to be more resilient of late, even amid a weakening job market. For employers, there’s apparently considerable appeal in tools that automate some of the drudgework and administrative work, to focus on their primary mission.

And for investors there’s also potential for some good returns. The most recent big exit offering validation for this thesis is ServiceTitan, the software platform for home services providers that went public in December. Shares got a boost last week following a strong earnings report, pushing its market cap to around $11 billion. Seems you can do alright on public markets, too, as a software company focused on the frontline workforce.