Pave receives Y Combinator support for better startup

Pave receives Y Combinator support for better startup compensationTools, again

Pave receives Y Combinator support for better startup

Pave, a San Francisco-based startup that helps companies benchmark, plan and communicate compensation to their employees, has raised a $46 million Series B. YC Continuity led the round, which also saw participation from Andreessen Horowitz and Bessemer Venture Partners. The round comes eight months after Pave closed a $16 million Series A round. Pave is now valued at $400million, an increase of $75 million from last year.

Pave was founded with an ambitious goal. Can Pave measure the pay of venture-backed companies and assist startups in moving their compensation tables off spreadsheets? Glassdoor and AngelList have tried to create a comparable benchmark-worthy data collection, but Pave might have an advantage over those who have tried the same thing before. Y Combinator is the biggest startup accelerator in the world, having helped Pave to incubate. One-third of Pave’s 900 clients to date have come from Y Combinator and CEO Matthew Schulman sees this number increasing.

Schulman stated that YC’s support for Pave, the YC-stamped industry leader in [compensation tech] is and will be transformative in terms of our distribution and our ability to provide ample data coverage through our benchmarking software. Pave’s distribution model is similar to that of Fintech firm Brex, which was also backed by Y Combinator Continuity. According to the founder, 60% of YC businesses are currently active Brex customers.

YC’s dependence on them could lead to platform risk. This is due to the fact that the accelerator often invests in rivals — sometimes within the same batch. That said, an investment from Y Combinator Continuity, which does Series B rounds and higher, may be a signal that YC has found the comptech player it wants to back. Pave has added Ali Rowghani as its managing director and ex-COO of Twitter.

The startup’s data is vital to its success. It supports each of Pave’s main services, which include three key ones for companies. Pave first uses data from partners and the market to benchmark employee salaries. The startup also integrates with other HR tools like Workday, Carta, and Greenhouse, giving customers an overview of how current employees are being paid and which promotions and salaries make sense. Third, data analysis results in formal offers and packages of compensation that can be offered to employees.

Pave currently has data access to over 65,000 employees records. While the first product is a top-of-funnel service that Pave offers, the second and third products are premium services available as part of any enterprise software contract.

Compensation is fraught with inequity. This leads to the gender wage disparity and market gaps regarding minorities’ pay disparity.

Pave is a goal of Schulman to get companies to do their D&I analysis every year instead of once per year.Company plans to create diversity- and inclusion-specific dashboards to allow companies to identify inequalities and get suggestions on how to fix them.

Schulman stated that “What gets measured gets improved.” Pave began to monitor its compensation and diversity metrics in order to communicate better with employees. This may also help other companies do the same. About 33% of Pave’s workforce identify as women, compared to an industry average of 28.8%. Half of Pave’s executives, and half of Pave’s board members, identify as women. Pave has pledged to have 50% of client-facing positions, including customer success managers, sales representatives, and other members from underrepresented communities, be women.

Although Pave has begun to publish its internal benchmarks, it is not yet standard for tech companies to be transparent about diversity. It is much easier to obtain valuations than details on the composition of individuals who were previously overlooked within an organization. Pave recently launched the Pave Data Lab, which uses its data set to showcase compensation trends and inequities within how tech workers are paid. Pave does not require companies to submit gender or race data into its benchmarking tool. It also didn’t reveal how many companies use that data.

The company hopes that noise will help make a difference. All companies can now access Pave’s benchmarking data on compensation. This will provide more information and standardization to the complex world of compensation.

Publiated at Tue 10 August 2021 23.08:03 +0000

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