Few people get rich working short-term and hourly wage jobs. However, it is how most of us make a living.
In the U.S. for instance, over 76 million workers were paid at hourly rates last year, representing over 55% of all wage and salary recipients. Millions more earn freelance and gig work income calculated using other methods.
Given that so many of us are working hourly and gig-based jobs, it’s not surprising to see startups scaling up to address the market. Globally, such companies have raised billions in venture and growth funding over the past couple of years, per an analysis of Crunchbase data.
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And investment continues to flow to the space. Just last week, for example, Instawork, a platform for connecting businesses with skilled hourly workers, raised $60 million in a Series D funding led by TCV. The San Francisco-based company counts major retailers, sports stadiums and light industrial employers among its users.
Who’s getting funded
Instawork is one of dozens of companies targeting hourly and gig workers and employers that has raised funding in the past couple of years. Using Crunchbase data, we compiled a sample set of 26 such startups:
Collectively, the companies on our list have raised over $2.7 billion to date with offerings including scheduling apps, payroll and compliance tools, and platforms to quickly connect workers with employers in need of their services.
Among the most heavily funded this past year is Fountain, an applicant tracking system for hiring large numbers of hourly employees. The San Francisco-based company, which recently rolled out a conversational AI tool for hiring managers, pulled in a $100 million Series B last June.
In terms of total funding, the standout is Jobandtalent, which connects workers with gig-type assignments in industries including hospitality, logistics and construction. Founded in 2009, the Madrid-based company has raised over $700 million in equity funding, including a $500 million SoftBank Vision Fund-led Series E in late 2021.
WorkJam, meanwhile, is taking a different approach. The Montreal-based company, which picked up a $50 million Series D in November, offers tools for employers of shift workers to set schedules, manage tasks and organize training.
Tight market for employers
Startups’ are focusing on hourly and gig workforces at a time when employers are struggling to fill these kinds of jobs at prevailing wages.
As of the end of March, there were 9.6 million U.S. job openings, per the U.S. Bureau of Labor Statistics. That’s actually down from December, when there were 11.2 million openings, but still signifies a tight labor market, with demand for hourly workers well exceeding supply at current pay rates.
Labor shortages have prompted a number of large employers to hike hourly wages in recent months. The Home Depot, for instance, raised starting hourly pay to $15. Walmart announced an average hourly wage of more than $17.50, while Amazon said in September that starting pay for warehouse and delivery workers will be more than $19 an hour.
Among startups, the hope is that the apps and tools they’re offering can play a role alongside pay increases to make it easier and more appealing for hourly and gig workers to take on a new position.
For workers, of course, a shiny new app is a secondary consideration to things like available hours and pay. However, it certainly doesn’t hurt to make the job of getting hired and onboarded a little easier.
Illustration: Dom Guzman
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