Connecteam raises $120M at an $800M+ valuation for comms app for deskless workers

(Techcrunch, 6th March 2022): After years of being overlooked, frontline employees and others who do not sit at desks all day are taking center stage in a new wave of workplace productivity apps.

In the latest development, Connecteam — an all-in-one app providing HR tools, communications services, and daily operations management (e.g., scheduling, virtual time cards) — has raised $120 million. It will use the funding to continue building out the functionality on its platform — recruitment is one area that is currently missing, for example — and to bring on more customers.

Stripes and Insight Partners co-led this round, a Series C, with Tiger Global, Qumra Capital and O.G. Tech also participating. Connecteam did not disclose its valuation, but Amir Nehemia, the startup’s CEO and co-founder, hinted that it was typical for a Series C. A well-placed source tells me that the valuation with this round is just over $800 million.

Connecteam — founded in Israel, where it still has offices, but officially based in New York — last raised money, a $37 million Series B, only 10 months ago. But in what is a sign of the times, the startup has been in the middle of a growth spurt, not only because deskless workers, estimated to account for some 80% of all workers globally, are getting more attention, but because the push for more digital transformation has led companies to invest more into technology to make those teams’ jobs more efficient.

Revenues and business expanded by 400% last year, and it is on track to do the same again this year, and that caught the eye of investors and led to this growth round.

Building tech for frontline and other unanchored workers has become a more crowded field, including tech to address specific functions (e.g., EduMe building a training and online learning platform, or Meta’s Workplace honing its focus on one-to-many internal communications and conversations) and those providing platforms or more general-purpose approaches that compete more directly with Connecteam. (That list includes Flip, which announced funding just last month after passing 1 million users, Snapshift, Microsoft’s Teams, Crew (now owned by Block/Square), Blink, Yoobic, When I Work, Workstream and many more.

But in that context, Connecteam is one of the bigger players, currently with 20,000 business customers ranging from small businesses with five employees to organizations like SodaStream (part of Pepsi), Nike and McDonalds, and covering what COO Yuval Magid described as 200 different verticals. That customer base works out to around half a million monthly active users across 80 countries, although currently North America accounts for 70% of its business.

And beyond that, the startup is finding success because it’s tapping into another important enterprise trend, which is a current interest in buying products that cover several functions rather than going for point solutions, which makes both the app and IT spend easier to manage.

Connecteam does provide an option for those who need it to integrate third-party tools — something a larger enterprise might choose to use — but it also gives customers the option of importing data from other software if it’s migrating to do everything on Connecteam.

“There is no need to have several apps” when you use Connecteam, Nehemia said. “This is why we include a bunch of features.”

It also has tried to put itself into the mindset of the customer in another regard, by aiming to make the app easy to use.

“You don’t require IT to implement Connecteam. You don’t need any training,” Nehemia said. “Our customers are busy and operational in nature.”