Advancements in technology have allowed businesses owners across varied industries to leverage software to manage nearly every aspect of their business. However, payroll has been one key aspect that’s been left out of most software solutions as it’s been viewed as a cumbersome undertaking in an external, siloed, and walled ecosystem that’s outside of the core capabilities of the software provider. Check is a payroll infrastructure platform that allows business software platforms to seamlessly integrate payroll functionality for their customers without significant expense nor technological resources. The company’s API, Component, provides the connectivity to offer payroll-as-a-service coupled with a customer management dashboard called Console. Both are customizable to allow for tailored solutions to serve the software platform’s customer needs and Check also offers nativfe integrations with a growing list of partners including QuickBooks and Plaid. Launched in early 2021, Check’s technology stack fuels embedded innovation for SaaS, workforce management, financial services, and staffing businesses, powering payroll for 250K businesses that serve 4M+ employees in aggregate.
AlleyWatch caught up with Check CEO and Cofounder Andrew Brown to learn more about the company’s mission to build the next generation of payroll connectivity, the expansion plans, latest round of funding, which brings the total funding raised to $119M, and much, much more…
Who were your investors and how much did you raise?
We raised a $75 million Series C led by Stripe, with participation from our existing investors Bedrock, Thrive , and Index.
Tell us about the product or service that Check offers.
Check is a payroll infrastructure company that empowers platforms to embed payroll solutions for their customers. We offer everything companies need to build, launch, and scale new payroll businesses. Payroll is notoriously complex, but we’ve been able to simplify and abstract away much of that complexity within our platform, so that our customers don’t have to deal with it.
What inspired the start of Check?
I’m a developer myself, so I have long been motivated by the power of software to solve hard problems, and save people time in the process. Payroll is a perfect example of an incredibly complex space that is well suited to being automated in software. But it was actually in getting close to the team at Homebase a few years ago that we realized that we needed to build Check. They made clear to us just how acute the needs of their small business customers were, and how in many ways we were ideally situated to solve them by providing a robust platform for Homebase to build on.
How is Check different?
Check is really pioneering this category of embedded payroll. Prior to our launch last year, it took platforms many years and tens of millions of dollars just to build a basic payroll experience. We’ve reduced that down to just quarters, and have made it orders of magnitude less expensive for them to enter the space.
Perhaps more importantly, we partner deeply with each of our customers to help them design and build their differentiated payroll businesses from the ground up. We’re not just an API or a set of tools. We’ve developed an entire methodology around helping our partners create the best payroll solutions for their particular customer set.
Put simply, Check is building the enduring, independent infrastructure layer the payroll industry has long deserved, but never had.
What market does Check target and how big is it?
We play in the payroll market — and really, by creating the core innovation layer for our customers to build and scale payroll products, we help them build powerful new payroll business lines.
The payroll market in the US is huge yet fragmented. Collectively the market cap of payroll companies is hundreds of billions of dollars—ten are worth over $10B, and many more are worth more than $2B. But the most popular solutions have NPS scores below 0.
Payroll providers occupy a strategic, under-explored position in the fintech ecosystem as the first touchpoint for the $10 trillion in wages paid in the US per year. People — and the small businesses who employ them — frankly deserve better, and that’s a big part of what motivates us.
What’s your business model?
Our customers are software platforms looking to embed payroll as part of the products and services they deliver to other customers. These platforms are often vertical SaaS, workforce management, financial services, and staffing businesses. We charge a flat fee per company, and then an additional charge based on the number of employees being paid.
Our customers are software platforms looking to embed payroll as part of the products and services they deliver to other customers. These platforms are often vertical SaaS, workforce management, financial services, and staffing businesses. We charge a flat fee per company, and then an additional charge based on the number of employees being paid.
What are your post-COVID office plans?
We’ve built and expanded our team over the course of the pandemic, so we have more than 100 people across the United States, with hubs in New York and San Francisco. We’ve grown as a remote workforce, and as a result, we lead with respect and empathy, encouraging our team to work where they feel most productive and comfortable.
What was the funding process like?
Stripe co-led our Series B, and it was great building a strong relationship with them over the last year. When we thought about our next raise, it seemed like a great and natural fit to double down with them and our other investors, all of whom have been great supporters.
What are the biggest challenges that you faced while raising capital?
Probably the biggest challenge was just putting the ball in motion while Check is in hyper-growth mode.
What factors about your business led your investors to write the check?
It’s a confluence of factors, but at the end of the day, we’re solving a huge problem in an even bigger market, with strong growth.
What are the milestones you plan to achieve in the next six months?
Our partners now collectively serve more than 250K businesses and 4M employees. Our hope is to continue to partner with more best-in-class platforms to support even more businesses and employees across the country.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Capital can be a constraint, but disciplined capital management helps build enduring businesses. Keep focused on the customer and solving their problems, and in my experience, success will follow.
Where do you see the company going now over the near term?
We’re planning to grow the team and to continue to make Check the easiest and most robust platform for building, launching, and scaling new payroll businesses.
What’s your favorite outdoor dining restaurant in NYC?
The garden at Claro in Gowanus is hard to beat!
