Checkr Is Raising $30M+ For Its Background Checking API, Y Combinator Investing

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As on-demand businesses like Uber and Instacart grow quickly, so too do the B2B startups that service their wider ecosystem. In the latest development, TechCrunch has learned and confirmed with several sources that Checkr — which runs background checks and vets potential hires by way of an API for the likes of Uber, Instacart and Handy, and other fast-growing startups like Zenefits and Weebly — is raising a Series B of at least $30 million, at a valuation north of $250 million.

What’s perhaps just as notable about the raise is who’s behind it. TechCrunch understands that the round includes Y Combinator, the well known startup accelerator where Checkr was a part of the Summer 2014 class.

YC is actually leading the round — its first lead investment out of its Continuity Fund.

YC has yet to officially announce the size of the Continuity Fund, but it’s been rumored to be anywhere between $1 billion and several billion dollars more. YC has also not revealed too many details about how it will be run, although in July, YC president Sam Altman noted that YC would take pro-rata investments in startups valued at less than $250 million (leaving out details of what YC would do in cases where the startups are valued at over $250 million).

Others expected to participate in this round include David Spector and Elad Gil, two early investors in the company. With the round yet to close, there may be more VCs added to the list.

Prior to this latest round, Checkr had raised just over $9 million from a long list of angel investors, as well as larger VCs like Google Ventures and Accel, with the latter leading the company’s previous round.

Co-founded by Daniel Yanisse and Jonathan Perichon, Checkr is filling a hole in the world of startups, particularly those that are staffing up fast with contract workers.

In a nutshell, the company offers a quicker, cheaper and more simplified way to vet a potential worker, covering data like social security number validation, address history, national and county criminal records and driving history. A business can run checks through Checkr’s online form; or, by way of an API, it can integrate a Checkr check into its hiring systems and other onboarding software such as Workable and Zenefits.

Checkr’s business is priced per person, per report in tiers of $25, $35 and a tailored price based on specific requirements that may include deeper checks on motor vehicles, international searches and drug screening.

From what we understand there are a few reasons why Checkr is attracting investors. First and foremost is the fact that Checkr’s business is seeing a lot of traction and growth in the current startup market, but also with a lot of potential to win more deals from the wider world of businesses that need to run background checks of both temporary and permanent workers.

“The market for background checks isn’t going anywhere, it will be around for a very long time. They just made it easier and cheaper,” one source said.

That’s not to say that Checkr is alone in trying to tackle the space. Competitors include Goodhire in the U.S., and Onfido in London. Perhaps to help stave off rivals, and to keep up with its growth, we understand that Checkr’s new funding will be used for business development and to hire more talent.

Checkr, Y Combinator and other investors declined to comment for this story.

Featured Image: Andrew Caballero-Reynolds/Getty Images