San Francisco-based compensation planning start-up, Pave has raised US$46 million in a Series B funding round led by YC Continuity which saw contributions from Andreessen Horowitz and Bessemer Venture Partners. The staggering amount raised in the Series B funding has put Pave’s valuation at US$400 million, up from US$75 million a year ago. Earlier, Pave closed a US$16 million Series A funding round eight months ago.
Y Combinator, one of the largest startup accelerators in the world, helped in the incubation of Pave and is also headlining its most recent round through Pave’s later-stage capital vehicle. Pave has over 900 customers to date, of which one-third comes from Y Combinator. Matthew Schulman, CEO of Pave said YC’s deep support will continue to be game-changing for the distribution and ability to possess ample data coverage in Pave’s benchmarking product. He also made a comparison of Pave’s distribution trajectory being similar to Y Combinator Continuity backed fintech company Brex. He estimated that 60% of YC companies are active Brex customers.
Considering that YC accelerator invests in competitors more so often within the same batch, Pave’s platform could be at risk due to reliance on it. Y Combinator Continuity’s investment in Series B round indicates its interest in acquiring the Comptech player back. Pave’s board will soon be joined by Ali Rowghani, the managing director of the fund and former COO of Twitter.
Pave’s data will support each of its three main services;
- Using market and partner data to help companies benchmark salaries for their employees.
- Integration of Pave with HR tools such as Workday, Carta, and Greenhouse to give its customers a holistic picture of how employees are currently being compensated, and what makes sense for promotion cycles and salary bumps.
- The data work will be finalised into formal offers and compensation packages that employers can then offer to new and old employees.
The current customer base of Pave accounts for data on over 65,000 employee records. The first product is seen as a free top-of-funnel service, and the last two are paid services offered up like any enterprise software contract.
Schulman outlines conducting consistent D&I analysis unlike doing it once in a year as one of Pave’s primary goals. Pave is also planning a scheme to build diversity and inclusion-specific dashboards that allow companies to gauge inequities and access ways or suggestions to improve their breakdown. In the bid to increase transparency for its employees, thus also inspiring other companies, Pave has started to track its own compensation and diversity metrics.
In the gender representation domain, Pave has been faring quite well as about 33% of Pave’s workforce identify as women, compared to an industry average of 28.8%. Women are at the forefront of Pave’s executive team and board members. The company has claimed that 50% of its client-facing roles, which include customer success managers and sales members, “to be female or persons from underrepresented groups.”
However, transparency around diversity in the workforce is still a problem within tech companies. Pave Data Lab has been launched by Pave recently. It uses its data set to show compensation trends and inequities within how tech workers are paid. However, Pave has not introduced a feature that requires companies to upload gender and race information into its benchmarking tool and didn’t disclose what specific percentage of companies on its platform share that data.