Stripe Leads $75 Million investment round into Payroll Infrastructure startup check
Check, a three-year-old firm that provides software solutions for digitizing payrolls, announced Wednesday that it had raised $75 million in a new investment round as startups increasingly embed payroll into their software offerings.
Stripe, together with fellow repeat investors Bedrock, Thrive, and Index, led the Series-C investment round. Check now has a total of $119 million in investment and a $725 million value, thanks to this current round. Check, a three-year-old firm that provides software solutions for digitizing payrolls, announced Wednesday that it had raised $75 million in a new investment round as startups increasingly embed payroll into their software offerings.
Stripe, together with fellow repeat investors Bedrock, Thrive, and Index, led the Series-C investment round. Check now has a total of $119 million in investment and a $725 million value, thanks to this current round.
While long-standing market leaders such as ADP Workforce and Paychex continue to dominate the increasingly fragmented payroll sector, startups such as ServiceTitan and Homebase seek alternatives. Check caters to businesses like this.
“We work with small company platforms to help them design, launch, and scale payroll products that they offer to their small business customers,” Check co-founder and CEO Andrew Brown tells Forbes. “Our customers did not exist ten years ago.”
Stripe’s early investment has been beneficial to Check, which emerged from stealth mode a little more than a year ago.
Both companies position themselves as “platforms for platforms,” with Stripe supporting businesses in accepting online credit card payments and Check to allow payroll systems to be integrated into management tools.
According to Brown, these similarities make Check compatible with Stripe’s sales, legal, compliance, and technical teams, which assist the firm.
Check, a firm that creates software solutions for digitizing business payrolls, announced this morning that it had raised $35 million in a new fundraising round after being in stealth mode for two years. The business has now raised a total of $44 million with this current round.
Stripe’s involvement is noteworthy, given Check is based on Stripe’s aim of establishing payments infrastructure for the increasingly digital economy. While Stripe assists firms in accepting credit card payments online, Check focuses on connecting payroll systems with the rapidly expanding assortment of business management software products.
Check co-founder and CEO Andrew Brown, as well as a large portion of his staff, formerly worked on the ebook firm Oyster, which was acquired by Google in 2015.
Many business software programs are tailored to specific types of small businesses, such as plumbers, salons, or coffee shops. Payroll features are already available in several of these business management solutions, such as the restaurant program Toast.
Brown, on the other hand, claims that the complexity of digitizing payroll, including the requirement to automate tax withholding for employees in many countries, makes constructing those capabilities from the ground up too difficult and expensive for companies with smaller target markets.
“Think about a yoga studio or a gym and the software that powers their business,” Brown explains. “They may manage the number of employees, book classes through the program, and take payments from customers.” However, because they are unable to finish payroll, they are forced to export that data and complete it elsewhere.”
According to Check, the majority of its customers pay a set fee per business user, plus a charge based on the number of employees paid. Stripe, which uses a fundamentally similar concept for its online payments network, has developed over the last decade into a private behemoth valued at up to $100 billion.
However, Check’s market is larger than Stripe’s in terms of dollar volume. According to J.P. Morgan, online credit and debit card payments in the United States totaled $348.7 billion in 2019.
According to the Bureau of Labor Statistics, the yearly volume of payroll in the United States is close to $9 trillion, and Stripe research revealed that three out of every four organizations utilize the type of industry-specific management software that Checks payroll products are built to interact with.