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RemoFirst raises $25M in Series A to democratise global hiring

RemoFirst raises $25M in Series A to democratise global hiring

Understand why investors invested in RemoFirst, a technology startup offering an all-in-one platform for companies to hire remote employees from anywhere in the world.

Decode is where I breakdown a venture capital investment decision — RemoFirst raised a $25M in Series A led by Octopus Ventures led and included participation from existing backers QED, Mouro Capital and Counterpart Ventures.

RemoFirst is a technology startup offering an all-in-one platform for companies to hire remote employees from anywhere in the world. RemoFirst provides solutions around Human Resources, Finance and Legal to democratise global hiring making it easier for companies to onboard the best talent.

Decode — RemoFirst

Company Overview

Founded in 2021 by Nurasyl Serik and Volodymyr Fedoriv, RemoFirst simplifies international hiring by making it easy for companies to hire globally. RemoFirst acts as the Employer of Record (EOR) for companies, handling the hiring and payment of employees on their behalf. RemoFirst also manages HR procedures and employment contracts, allowing companies to focus solely on approving invoices.

As the Employer of Record (EOR), RemoFirst assumes all legal responsibilities related to employment, including contracts, compliance, documents, payroll, benefits, etc., ensuring that companies can hire from any country in full compliance with local labor laws.

RemoFirst reduces EOR maintenance costs by offering affordable pricing, a simplified service model, a transparent pricing structure, and efficient platform features. These factors make RemoFirst an attractive option for businesses looking to manage their global workforce cost-effectively.

Market

An Employer of Record (EOR) service not only helps in hiring remote employees but also enables organizations to expand globally with minimal effort. A company considering expansion to a newer geographic market can easily hire locally with the help of EORs.

According to an Employer of Record Market Report, the global Employer of Record market was $4.2 billion in 2021 and is projected to reach $8 billion by the year 2031. Deel’s recent acquisition of PaySpace also strengthens the opportunities in the market. On a side note, the remote workplace services market is expected to increase to $58 billion by 2027.

RemoFirst is bullish on remote work hiring, positioning themselves as a product helping companies hire remote employees rather than an all-in-one HR and Payroll management platform for global hiring.

The challenge for RemoFirst would be to create differentiation from competitors like Deel, Rippling, and Oyster — one of them being the cost effectiveness they currently provide. The price of hiring globally increased once more players entered the market, but RemoFirst has made the process of hiring more sustainable by partnering with in-country legal “experts,” whereas most competitors opt to set up entities themselves, thus reducing the costs.

I believe that this combination of differentiation in pricing and catering to the niche that is remote work would help RemoFirst uncover and solve global hiring problems specific to this niche. RemoFirst currently charges only 30% of what Deel charges and is already showing rapid growth.

Business Model

RemoFirst offers a straightforward pricing model

The Employer of Record (EOR) service starts at $199 / person / month
The Contractors service start at $25 / person / month
Extra charges for additional services such as employee insurance, equipment provisioning etc.

This pricing can attract remote companies and SMEs compared to competitors such as Deel and Oyster who charge $599 / person / month for their EOR service.

Traction

RemoFirst was initially bootstrapped and quickly grew to a seven-digit revenue with just five employees. They also had zero customer churn within the first year indicating a great customer experience.

Later, they closed a seed round of $14M in 2022. RemoFirst now has thousands of customers, including Zocdoc, the World Health Organization, and Mastercard, and has grown its revenues by 10X since its seed round funding in early 2022.

Team

RemoFirst’s CEO, Nurasyl Serik, is a serial entrepreneur who had previously collaborated with Volodymyr Fedoriv, the COO, to launch a startup called Felix Math, an AI-powered math tutor app, which they eventually had an exit from. Both of them had experience starting bootstrapped companies in the UK, and they found that being remote-first was a way to save costs. They realized that one of the biggest challenges for remote-first companies was hiring people around the world in a compliant way. They didn’t understand why global payroll was so painful in this day and age, and that served as a big motivation to tackle this industry and build something that they could use themselves.

The RemoFirst team has grown from a 5-person team to a strong team of 40+ people who have worked at companies like Amazon, LinkedIn, and Goldman Sachs..

Risks

The payroll and compliance market can be highly volatile, especially with changing regulations and economic conditions in different countries.

RemoFirst needs to establish a solid competitive advantage. Currently, they offer similar services to their competitors, with no major significant differentiation other than pricing. They also provide fewer services compared to other products in the market. However, I believe that the team can crack this problem.

The business is dependent on global economic conditions, as it relies on the economic situations across the countries where companies and talent are situated.

Conclusion

Overall, investing in RemoFirst for Series A seems like a smart move. It has a strong team determined to solve a real problem. Plus, Nurasyl and Volodymyr have a good history of working together. Despite competition, the remote work market offers plenty of opportunities. RemoFirst also made decent revenue early on, even without big investments. While I don’t know their exact valuation, raising $14M in seed funding back in 2022 is impressive and shows promise. Even though all these factors played a huge role, the current timing, where remote work culture is growing, also played a significant role in the recent funding.