San Francisco-based benefits software developer Ease raised a $41 million Series C to help aid small and medium-sized businesses in providing benefits to their employees.
The round was led by Spectrum Equity with participation from existing investors Centana Growth Partners, Propel Venture Partners, Freestyle Capital, Compound Ventures and Upside Partnership. The new round brings the company’s total funding to $70 million, according to the company.
Founded in 2012, Ease’s cloud-based platform helps SMBs — usually targeting those between two and 250 employees — offer health, life and medical benefits to employees. The platform is used by more than 2,000 insurance agencies and 75,000 businesses with more than 2.5 million employees. The platform is free to businesses, as providers pay to be on the platform.
“The differentiator for us is the size of the business we focus on,” said co-founder and CEO David Reid. “We focus on the SMB market.”
While it seems logical to think that during the pandemic most small and medium-sized businesses were not focused on benefits, Reid said it actually accelerated adoption, as employees needed easy access and information for their benefits while providers could no longer have in-person meetings to peddle their plans.
“It used to be a nice have and went to a must have,” he said.
The human resources and benefits software market is sparse of competitors. While large providers such as ADP and Kronos sell to the enterprise market, newer startups such as Gusto and Namely focus on the SMB market. Reid said Ease helps separate itself by its offerings, and that the company plans to add even more providers to its platform after its new raise.
Ease also plans to increase the platform’s ease of use for employees to navigate their benefits, Reid said.
Vic Parker, managing director at Spectrum Equity, said given the company’s growth profile and nationwide footprint, coupled with its role as a system of record and automation, he believes Ease will have multiple options for an eventual exit as it looks to the future.
“We think its target market is large enough to support sustained rapid growth as an independent company over many years,” he said. “However, with increased scale we also believe Ease will be an interesting acquisition target for both strategic and financial buyers.”