On-demand staffing platform Wonolo has announced a $13 million round of financing. The Series B gives the San Francisco-based startup, a marketplace that connects companies with gig economy workers, a nice new infusion of cash. Notably, it also marks the first “public” investment led by Sequoia Capital’s Jess Lee. (The investor has led a couple of other rounds of financing, but those companies are still in stealth mode.)
Lee joined Silicon Valley venture firm Sequoia Capital as its first female investing partner in the U.S. In late 2016. Before that, she spent her career mostly on the consumer side of tech, building and then selling fashion search engine Polyvore to Yahoo in 2015.
While the Wonolo investment seems like a departure from her former area of focus, Lee says she was drawn to the startup’s founders because of their “grit and capital efficiency.” She was also attracted by the growing opportunities in the overall “future of work” category, and believes there is plenty of room for innovation in this space.
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“Some of the greatest and most important companies are going to come from ideas that really disrupt how people live and work,” Lee said in an exclusive interview with Coins2Day. “Wonolo fills an enormous gap in underemployment.”
The startup, co-founded by entrepreneurs AJ Brustein and Yong Kim, was conceived in Coca-Cola’s now-shuttered “Founders” program, an incubator hatched by the soda maker several years ago. In 2014, Wonolo was spun out of the program, and raised its first round of outside funding (it has now raised a total of $25 million). But the company’s original mission has remained intact: Wonolo matches underemployed hourly workers with “unfilled work shifts at top businesses in retail, manufacturing, shipping and logistics, ecommerce and other industries.” Coca-Cola is still a customer, as is Papa John’s, Uniqlo, and The North Face. Here’s how it works: These customers set a price for each job they need filled (think delivery drivers and fulfillment) and Wonolo then gets paid a fee on top of the wages paid to workers.
According to the company, more than 100,000 people currently use the platform to find jobs, primarily supplementing existing hourly work. But as Sequoia’s Lee points out, there are many more Americans who fall under the “underemployed” category. Current estimates from the Bureau of Labor Statistics put that number at more than 5 million—this includes those who are only able to secure up to 30 hours of work per week. Wonolo’s founders think that number is actually much larger.
“It is hard to track,” says co-founder Kim. “Millions of people do hourly work, oftentimes working multiple jobs.”
That fact has made Sequoia’s Lee hyper-aware of the growing need for gig economy workers to find more work, and to have access to resources that most hourly workers don’t have. “Now I always ask Uber and Lyft drivers where else they get their other jobs,” she says. “The long-term plan with Wonolo is to build a community [of these workers].”
That community could also offer benefits and access to legal help. (Wonolo says it already helps users find health care plans and was the first gig economy platform to provide occupational accident insurance.) To be sure, there are plenty of other marketplaces that cater to gig economy workers, though each has their own flavor—like TaskRabbit and Thumbtack, to name a few. And workers can go directly to Uber or Lyft to start driving, no need for a middleman of any sort. Still, Lee believes this growing workforce will mean growing needs. “We’re seeing new ways of evaluating [gig economy] workers, different ways of interviewing and benefits for folks who are freelance,” says the investor.
As for her own gig at Sequoia (no, she’s not an hourly worker), Lee says that the onboarding process at the firm has been a “steep learning curve.”
“It’s an incredible privilege to be on this side of the table,” she says. “The funny thing about venture though is that you might know you like the job, but you won’t know if you’re good at it for maybe another seven years.”
