BetterWorks gets $8M for employee rewards program

The startup helps small businesses retain top talent by offering big rewards

I once worked at a school that had potluck Fridays, and I always thought that was the most awesome perk ever.  Every Friday, I ate for free!  (Because I never brought anything to the potluck.) This was a significant boost to my employee morale, as my poverty had made me bitter and miserly. 

One startup, BetterWorks, has taken the concept of employee perks and combined it with daily deals to create a unique employee rewards platform that goes beyond salary and health benefits to recognize employees for the little extras that they do.  And the startup is getting some big new VC supporters.  BetterWorks on Tuesday announced its $8 million Series A round led by Redpoint Ventures, bringing the company’s total raised to $10 million.

The Los Angeles-based company was founded in 2010 by former CapLinked engineer George Ishii, former defense contractor and investor Paige Craig, and FarmVille creator Zao Yang.  (Note: Zao Yang recently participated in Vator Splash LA as a judge, and it was the first time I've ever seen a judge go up on stage with a beer in hand.)  

The goal: find a way to help small businesses retain good employees.

The problem was easy to spot: employees are typically rewarded with competitive salaries and good benefits, but that doesn’t account for the little extras that employees do, like working late, completing a task or assignment before the deadline, going that extra mile to produce more thorough, comprehensive work, etc.  The solution, however, was more challenging to implement, since small businesses typically don’t have the budget to offer wide-ranging rewards programs that satisfy everyone’s needs. 

“I’ve built employee perks program before and it’s impossible to manually build a program that makes everyone happy,” explained CEO Paige Craig. “I’d make a deal with one gym then hear about another gym an employee would prefer. As a small business owner I didn’t have the time or leverage to negotiate and manage dozens of vendor relationships.”

Thus, BetterWorks was born.  The platform works by pooling small businesses together so that their combined savings add up to the same budget a large enterprise has to work with when it comes to implementing employee rewards.  To make things even easier, BetterWorks sources deals and services from local merchants to give employees a wide range of options from which to choose.

The platform is customizable, too, allowing business owners to specify that employees will pay in full, the business will pay in full, or the bill will be split between the two, while BetterWorks handles all the billing.

BetterWorks plans to use the new funds from this round to ramp up hiring, expansion, and development of the platform.