Back office stack for start-ups company Every hit the headlines in September 2024, by raising USD 22.5 million in new funding to add more products to its back-office suite.
Founded in 2021 by serial entrepreneur Rajeev Behera, founder and former chief executive of software company Reflektive, Every offers start-ups an all-in-one finance and human resources suite that combines banking, cards, bill payments, corporate treasury, tax, payroll and benefits.
In today’s episode of the “Start-up of the Week,” International Finance will talk about Every in detail.
A Very Unique Start-up
The idea for the company came from Behera’s time at Reflecktive (another similar venture known for providing a performance management platform for companies), in particular, errors he made while setting up the company’s back office. “Founders just want to focus on building. They don’t have time to learn complex subjects like payroll, taxes and accounting,” Behera told the SiliconANGLE in November 2023.
Every is offering its expertise to simplify back-office tasks like payroll, taxes and accounting for start-ups, thereby providing new entrepreneurs with some relief by supplying accountants and payroll specialists for expert guidance. Based in the United States, the venture is providing technical support in key areas including filing state taxes, helping founders choose the best healthcare plan and creating a customised treasury management plan to optimise yield while ensuring 100% of funds are insured.
“Start-up founders need a partner who takes them through each step and makes sure that their company is set up compliantly, so they can focus their time on finding product market fit and serving customers,” Behera summed up Every’s operational philosophy in these following words.
The company has found success in its offering, growing to over 150 customers in the American start-up circle, with 78% of clients using Every’s entire back office business suite.
“Every plans on using the new funding to add more products to their back office suite, including the first free incorporation solution in the market that is said by the company to enable founders to set up a corporate entity and instantly have their entire back office set up with the click of a button,” SiliconANGLE stated.
Redpoint Ventures LP led the Series A round, with Y Combinator, Okta Ventures, Base10 Partners Management and Formus Capital also participating.
“HR, finance and payroll back office ops can be particularly challenging early on for startups, but these functions are both critical and important to the foundation of any business,” said Rexhi Dollaku, general partner at Base10 Partners.
With Every, founders now have a solution that can get them back to focusing on their customers and product, and automate everything else, as the venture now does payroll, onboarding, and spend management for start-ups and small businesses.
However, it is operating in a jam-packed market, with competitors like unicorn start-ups Gusto, Rippling, and Deel also offering similar services. Also, the rival tally is considerably big, if we take companies like Mercury, Brex, Finally, Paylocity, and AccountsIQ into account.
However, Behera’s business plan revolves around his target customers and what he, along with Every’s co-founder Barry Peterson, is offering to keep them hooked on the start-up’s products and services.
The duo has positioned Every to help very early-stage tech start-ups, when it comes to assisting the latter to complete incorporation document-related works for free, apart from aiding them to set up business bank accounts as well as other back-office essentials. Every makes its money by charging monthly SaaS fees for other modules, like accounting, and interchange fees.
“We spent all this time building pretty advanced expense management, banking, payroll, all that stuff. Now we will release incorporation for founders, and we’re going to just give it away for free,” Behera told TechCrunch in September 2024.
After a 30-minute, white-glove onboarding session with Every, start-ups get an integrated suite of banking, payroll, HR onboarding, HR benefits, bookkeeping, taxes, state compliance, and so on. They also get a Slack channel where they can commiserate with other founders.
“Our customers don’t even look at competitors like Rippling once they do the incorporation, because they will already have a bank account with Every and can easily add other modules. So that’s our strategy,” Behera noted.
The company is currently catering for start-ups with fewer than 200 employees, not the growth-stage, deeper-pocketed customers where the bigger competitors dominate. The software is intended to support these new ventures through their first five years.
Behera imagines his fastest-growing customers to “graduate off” of Every, till the day when Every itself is a growth-stage fintech with software that can handle bigger customers.
Here Are The Products And Services
Every is the only “Back Office in-a-Box” that partners with start-up founders at the inception stage. The new entrepreneurs can create a C Corporation (tailored to start-up founders aiming for larger growth requiring outside investment) free of charge, apart from having the opportunity to set up with a Delaware C Corporation, which is the entity type every American start-up founder will need to be able to receive venture investments.
Since most online incorporation products are not built for tech start-ups, and often lag key documents, Every step to provide everything these new businesses need to be funded. The venture will also generate automated 83b filings (provision under the Internal Revenue Code (IRC) that gives an employee, or start-up founder, the option to pay taxes on the total fair market value of restricted stock at the time of granting) to ensure that the business owners not missing out on the tax benefits.
Just by spending USD 350 per month, start-ups can avail Every’s bookkeeping solutions, something which will help these new businesses categorise their transactions, apart from having a dedicated Controller to review the account books to ensure accuracy.
Every’s “Dedicated Bookkeeper” closes its clients’ books and generates financial statements in the format investors expect. The application further enriches the business’ spending data with robust vendor information, so the bookkeepers can more accurately categorise the transactions.
Every also provides “Business Bank Accounts” for start-ups, providing the latter with the much-needed unified financial operating system to scale and grow their operations. Businesses can create unlimited virtual cards for themselves and their employees in seconds. They can also control spend before it happens by setting daily/monthly spending limits or by creating burner cards for one-time purchases. The start-ups, through Every’s “Business Bank Accounts,” can also conduct bill payments with automated tax compliance.
Through Every, start-ups get the opportunity to invest in high-yield treasury bills and money market funds.
“Every provides your company access to buy, auto-roll, and ladder US Treasury Bills through an Atomic Invest LLC investment advisory account custodied at BNY Pershing, a leading global provider,” the venture stated further.
This solution works through “Treasury Autopilot,” which maximises treasury yields by automatically purchasing treasuries with a balance check and transfer from the user’s primary Every checking account.
The start-up owners can maximise yield and keep their cash safe at the same time, as the US Treasury securities are considered one of the safest investments because of the backing of the American Government. The ventures can create a US Treasury bond ladder that maximises interest rates while ensuring that the customers always have six months of working capital in liquid assets.
Through “Taxes 365,” Every takes care of the start-ups’ tax deadlines, all year long. By availing of this service, entrepreneurs can breathe easy as the company prepares and files their federal and state income taxes, 1099s, and franchise taxes. The integrated tax services follow seamlessly with Every’s dedicated bookkeeping, ensuring the clients’ financial (especially tax) records are in a single place.
And finally, let’s talk about Every’s “HR & Payroll” tool, which offers full-service payroll and tax filings in 50 American states. The start-up collects all documents the entrepreneurs need to stay compliant with federal and state regulations.
“It’s hard to attract tech workers. We will set you up with benefits that will keep you on pace with other tech start-ups. Hire employees in all 50 states. Set them up automatically with payroll, benefits, and expense controls. We save you hours of work and penalties by setting up state tax accounts for you,” Every commented.
The Road Ahead
Every got featured in the Y Combinator’s “Summer 2023 Batch.” Also, Behera’s previous experience as the co-founder of the HR employee reviews company Reflektive (which before its sale to Learning Technologies Group in 2021, raised over USD 100 million in funding from the likes of Andreessen Horowitz and TPG) makes him a prominent name in the American start-up circle.
Nearly half of Every’s 150 customers come from Y Combinator’s network. Instead of going for the easy option of partnering with other fintechs, Behera and Peterson (former head of engineering at Reflektive), coded their entire HR payroll and banking products from scratch.
Until two months ago, Behera did all the sales, customer onboarding of the first 50 customers, customer support, and product specs and designs himself. As he got seed investment from private equity firm Redpoint Ventures, the latter led the Series A. Other VCs piled in because they were hearing from their portfolio companies who were already using Every.
The Series A deal came together in about two weeks, Behera said. Without revealing much about the company’s valuation, Every founder said that it was a standard 20% round, which, as per TechCrunch’s calculation, should put the valuation at around USD 112.5 million. Right now, Behera has about 20 employees and will use the money to hire and expand, primarily his engineering team, as well as to pay for the free incorporation and onboarding business model.
In February 2024, Every announced a partnership with “Founders Village,” a community of 5,000-plus founders, 2,100 investors, and 1,500 engineers in Silicon Valley. The tie-up has a mission: to create a village to raise a start-up.