based in Hamburg localyze is gearing up to launch in North America in the coming months — made possible by another $35 million increase in Series B funding announced today, just over a year after it announced a $12 million Series A.
The Series B is led by US venture capital fund General Catalyst. Other investors in the round include Visionaries Club, Web Summit Fund and Frontline Ventures, along with Job van der Voort (CEO of Remote) and the founding team at Taxdoo.
Localyze’s valuation is not disclosed, but we understand it is a nine figure average.
Founded only in 2018, the Y Combinator-backed startup has quickly gained traction on a b2b SaaS platform aimed at employers seeking immigration and relocation logistics support. The startup offers admin automation and digital case management tools (plus some human support, of course) to ease the pressure of hiring international talent or managing cross-border staff relocations.
Focused on the talent war
Localyze says it’s responding to rising demand for greater labor mobility and work abroad among younger generations – and the ever raging war for talent suggests that employers willing, but able to facilitate such moves, might have the chance to making an advance towards less accommodative competitors.
It also points to the proliferation of multinational companies contributing to the global mobility of workers. While the pandemic effect that massively boosted flexible and remote working has certainly lingered – even as some companies try to push ‘back to the office’ mandates.
“I think a lot of companies right now are trying to find some sort of middle ground where they don’t say you can work in every country in the world,” suggests CEO and co-founder Hanna Asmussen, discussing recent trends in employee mobility. “What we’ve seen with our customer base is they’re trying to find a middle ground where they say these are the ten countries where we have an office or a hub or whatever, and then they let the employee pick one of those.
“Since the work itself is location independent, so it doesn’t matter if you work in your Berlin office or Madrid or Lisbon office, so they actually have more and more of those offers where you can actually work temporarily from abroad where you can another part of the administrative work — especially if you’re a non-European citizen. And that is something we see a lot in Europe and that will also grow worldwide because of course many companies have offices [in multiple countries]… So I think the middle ground will be an employer that also gives employers the opportunity to work abroad, so basically that’s why I think COVID-19 is actually accelerating the trend.”
She points to a partnership it has had for about a year with Remote, a distributed worker hiring platform (whose CEO is also an investor in this Series B) — with Localyze taking care of some of the immigration work that is linked to Remote-powered adopted in EMEA.
“This is super interesting and I think that’s the biggest proof of how well those trends fit together,” she suggests.
growth spurt
When we last chatted with Localyze, they reported 120+ customers. That has now grown more than 3x to over 400, per Asmussen, with sales also up 6x since last year. During this time, the startup has expanded to 10 markets across Europe.
And while early adopters of the platform are mostly tech startups — Localyze names check Pleo, Wefox, and Remote to the user list — Asmussen says it’s succeeded with a marketing push toward “more traditional companies.” (Although she confirms that adoption is still dominated by tech companies — perhaps about a quarter of customers right now are “non-tech, non-starter”.)
“We have a lot of companies in the tech space, more traditional stores,” she tells ukbusinessupdates.com. “The next phase would be more global companies – or European companies scaling up to the US or vice versa.
“And now we’re going to have talks with the really big international companies. The plan is really that in 2025 we will [will] have coverage of 50 markets worldwide and we’ve covered all global hubs and can serve the really big companies – because I think that’s where the large number of employees are moving around the world.”
“Long-term, I think the war for talent is playing out in pretty much every industry now, so that’s something that’s true for us now as well, knowing that the same product works in other areas also really broadens the targeting we have,” she adds. ready.
Localyze has also set its sights on expanding into Asia as it looks to onboard international companies – and plans to add the first countries in the region in 2023 as well.
“Over the next two years, we’ll try to get as much global expansion as we can – because, in terms of customers, usually the next customer scale they’re already in at least 10-15 different countries, so I think the US is already taking us to the next phase, but then also focus on the first markets in APAC – probably from the middle of next year, if all goes well. That would be the plan.”
North American Launch
In the shorter term, as Localyze gears up for its US (and Canada) launch, Asmussen says two of the three co-founders will split their time between Europe and the US as they work to build a local customer network on the other. side. side of the pond for at least early next year – probably based in New York.
The US launch itself doesn’t have a set date yet, but she suggests January 2023 is the most likely.
To prepare the ground there, Localyze recently bought a San Francisco-based HR company called TruePlan – which sold a workforce scheduling product – but purely as an acquisition to improve its UX and UI smarts, as it improves the look and feel wants to polish its platform for the US market, so some of the Series B funding will go toward product development.
“It was actually a perfect fit for what we needed,” she says of the acquihire. “We knew we wanted to use even more product now – they have some great engineers and also on the design side.
“I think the US – and US customers – care more about UX and UI than Europe. I think they have a different standard too… So I think we knew there we had to make a bigger push. I think that’s about two-thirds of the term on the R&D side and we also have an all-US go-to-market team and they sold to HR – and a similar audience to what we were initially going to do – and so it was a bit of a perfect fit.”
“At first it was a little scary doing that, about a week after we finished Series B – but right now I’m super happy we did it,” Asmussen added.
Relocation Rivalry
On the competitive front, she says there are differences in different regions. In Europe it usually goes against relocation agencies – which combine the relocation and immigration component – while in the US she notes that there is more of a split between the two, but also that there is more startup competition to contend with (such as startups targeting relocation support).
“In the US, there have been a few companies – Bridge VSthey focus more on the software part for HR and then work with immigration attorneys, so they don’t automate as much on the immigration piece as we do,” she suggests — while stressing that keeping the immigration side in-house is a differentiator for the approach of Localyze.
Another US immigration rival she mentions is LegalPad — which was… taken over by Deel this summeralso known as the remote unicorn.
While in Europe, she points to Estonia-based start-up Jobbatical, which has refocused on relocations in recent years.
“I think you should have control over the [immigration] process to ensure a certain quality,” she argues, working out how she sees her product standing out. “And to really achieve scale, you have to put as much into the product as you can and really try to focus on a product experience — so some of the funding goes into general expansion, but the second big part is really broken for the product because I think that in the long run is the only way we can really differentiate ourselves.”
But she agrees that the next phase of growth will “certainly” bring more competition — adding, “That will be interesting for us.”
Asked if she sees any reason to be concerned about the post-pandemic ‘return to office’ mandates, she says she is not concerned.
“I think everyone will have to settle for a middle ground” [on remote working]’ she predicts. “Companies that are really strict about it are going to have some sort of negative impact.”
