Startups

Wonolo raises $140M for its staffing platform used by 1M laborers and front-line workers

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High angle view of Male warehouse worker pulling a pallet truck at distribution warehouse.
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A rush of platforms have been built in the last several years that cater to the needs of knowledge workers, helping them find jobs (and employers find workers), managing the remuneration process regardless of location and addressing their professional development. But that is not the whole story. Today, a startup called Wonolo that has built a work-booking app for the other end of the employment spectrum — front-line workers and laborers — is announcing a major round of funding.

The company has picked up $140 million on the back of its own growth. Wonolo says that to date more than 1 million people — retail workers, delivery people, administrative clerks, general laborers, event staffers and more — have used its platform to find work, with the thousands of companies using its services ranging from huge consumer brands like Coca-Cola through to Uniqlo and Mutual of Omaha. It will be using the funding to continue expanding its platform in the U.S., with international expansion being something it would also like to consider down the road.

Leeds Illuminate led the round, with “strong participation” also from 137 Ventures and G2 Venture Partners, with Franklin Templeton also in the round. Wonolo last raised funding well before the pandemic hit — $32 million in 2018 — which speaks to the state of the company’s business and its margins, and the boost its business has seen in the last couple of years (including, specifically, the last 20 months). Wonolo has now raised more than $200 million, and Yong Kim, the company’s founder and CEO, said it is not disclosing its valuation, except to say that it has “significantly increased” since the last round.

Wonolo’s rise and ethos speaks to a specific moment in the world of labor and employment. Front-line workers took on a new profile during the COVID-19 pandemic. After years of gradual neglect and disregard in favor of the shift to digitally native “knowledge workers”, they suddenly became heroes, people who were taking on jobs and getting things done at a time when many others were staying at home and avoiding contact with others, either by choice, or company or municipal mandates.

That’s opened the door to thinking more about what the needs of those workers might be, and how to provide services that cater to them specifically. And in the view of Wonolo that has a direct correlation to what it has built. In short, there are front-line workers in the world today who do not want to be tied to single companies — either because they don’t want to be doing the same job day in, day out, or because they need more time flexibility — and so Wonolo has built a platform to help them continue to get jobs in that context.

“Fifty percent of the world is in front-line work, and those people have been misunderstood and underexposed,” Kim said. “Now we have a moment to empower them and we want to be the company that stands for them and educates the world on the amazing job they are doing. We want to increase awareness of that workforce, and we want them to be more fulfilled in their jobs.” He added that there is currently a “tremendous demand for flexible working” among blue-collar and front-line laborers.

The company sits in an interesting crossroads in the gig economy.

On the one hand, gig (or temporary, non-regular) working has found a strong current in the concept of “on demand”: companies staff up to meet a specific need in a specific time, whether they are built-in themselves as “on demand” businesses like Uber or delivery companies; or if they are not those kinds of businesses but are trying to operate in more agile ways.

On the other hand, being a gig worker can have its own issues. Work consistently enough for a single company, and you will start to wonder why you too shouldn’t be afforded the benefits of more standard employees. This has played out in a number of countries with more requirements demanded of those employing the workers, and will likely continue for years to come.

Wonolo, as a platform to encourage more gig working, does not offer anything equivalent to a “union” for those using its platform, but Kim says that it sees its role as an enabler of better practices. It provides some guidance on adequate pay, and Kim notes that the marketplace also plays a role: if a job is priced too low, no one picks it up. And Kim says that some who are regularly working for a single company do sign on sometimes as full-time staff, although, generally speaking, the appetite among Wonoloers (as the workers are called) is to remain freelance. That in itself has presented a challenge for some employers, he added — one reason why they turn to using Wonolo to find workers in the first place.

“The world of temporary staffing is massive, generating over $500 billion in global annual revenue. We see Wonolo as the leader in disrupting this space and offering a tech-first, flexible solution that helps businesses and workers alike,” said Stephanie Nieman, managing director at Leeds Illuminate, in a statement. “We are struck by how thoughtful Wonolo has been in building a business that puts workers first and is innovating with organizations to solve real labor problems across many industries.” Nieman is joining the startup’s board of directors with this round.

Longer term, it will be interesting to see what kinds of jobs fall into the Wonolo net, and I suspect that thinking of this as “front-line” will see that net widen. Kim said that teachers (specifically substitute teachers), nurses and other care staff, and even more technical jobs, are all categories that it will be looking to incorporate into its platform over the years. Whether you see that as more skilled jobs turning into “blue collar” or if blue collar is rising in stature might depend on how you choose to view it, but the fact remains that it points to another big trend in labor: gig jobs appear to be gaining ground over full-time work, and so platforms like Wonolo’s to connect people with jobs will continue to play a role.

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