Employer benefits—gym class reimbursement, mental health services, and access to discounted or free entertainment—are now more common than ever. But frequently, those benefits go unused due to lengthy and tedious reimbursement processes, antiquated software, and convoluted rules.
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Zestful, which is officially launching today and has raised $1.1 million from Bessemer Venture Partners, Day One Ventures, Matchstick Ventures, and Shrug Capital, has taken on the employee benefits challenge. The Denver-based company, which participated in Y Combinator’s winter 2017 cohort, is aiming to help employees and HR more seamlessly spend and manage benefits.
Zestful’s software, built on top of Stripe’s issuing API, lets HR teams view, activate, and deactivate reimbursements for services like Netflix or your SoulCycle membership. And employees, instead of uploading PDFs or filling out a form, simply purchase those approved services using a Zestful-provided debit card.
“You could say [that] we’re going to give everybody $50 a month that they can only spend on fitness and health products,” Mat Vogels, CEO and co-founder of Zestful, explained in an interview. “So the first of the month, it resets with $50, and then [an employee] can use [their] card at any of the hundreds of fitness products that we have on the app.”
Employers can choose to let those funds roll over into the following month or reset back to the original amount. Additionally, they can add to the balance with one-time rewards—like paying for an employee’s Spotify subscription for a year.
“The money that you spend in the fall, just like any gym reimbursements or discounts… would be considered as taxable income,” Vogels said. “The difference is Zestful tracks it throughout the year.” That means that a company can integrate with Quickbooks and other accounting software, and export and upload the information to its payroll software.
Vogels said that he thinks the sweet spot for customers using Zestful will likely be smaller companies.
“We’ve learned that there are really no other HR tools, especially perks and benefits tools, for companies that are in that sub-100 [employees] range,” Vogels said.
The company already has a number of beta users, with more on the waiting list. It charges $5 per employee on its platform, plus a one percent transaction fee. In the immediate future, Zestful’s annual goal is to have “tens of thousands” of employees using Zestful by the end of 2019, with a goal of 10,000 by the end of Q1 2019.
With the funding, the company, which is currently a team of six, will be doubling down on the development of its software.
“We’re in this HR space, which does require a lot of technical enhancement and integrations with products like Gusto or Justworks,” Vogels said. “So we want to make sure that we have the team fully in place for that to work.”
Editorial Note: A previous version mistakenly stated that Zestful participated in the YC winter 2016 cohort, it has since been updated to reflect that the team participated in the winter 2017 cohort.