Why Y Combinator companies are flocking to banking and HR startup Every | TechCrunch
Rajeev Behera’s new all-in-one HR startup, dubbed Every, is either brilliant or crazy.
Crazy because multi-module HR software that does payroll, onboarding, and spend management for small businesses is already a jam-packed market. Competitors include unicorn startups Gusto, Rippling, and Deel; incumbents that are strong in one area and are expanding into others like Mercury and Brex; and many smaller startups like Finally, Paylocity, and AccountsIQ.
Every’s investors clearly think Behera’s particular take on the idea is brilliant. Every just raised a $22.5 million Series A, led by Redpoint Ventures’ Alex Bard, with participation from Y Combinator, Okta Ventures, and Base10 Partners’ Rexhi Dollaku, TechCrunch can exclusively report.
Behera’s unique — and possibly brilliant — game plan revolves around his target customers and what he’s offering to hook them.
He and his co-founder, Barry Peterson, aimed Every at very early-stage tech startups and will help them do their incorporation documents for free, then set them up with a business bank account as well as other back-office essentials. Every makes its money by charging monthly SaaS fees for other modules, like accounting, and interchange fees.
“We spent all this time building pretty advanced expense management, banking, payroll, all that stuff. Now we will release incorporation for founders, and we’re going to just give it away for free,” Behera said.
After a 30-minute, white-glove onboarding session, startups get an integrated suite of banking, payroll, HR onboarding, HR benefits, bookkeeping, taxes, state compliance, and so on. (As we recently reported, the state compliance stuff is particularly tricky for startups.) Every’s customers also get a Slack channel where they can commiserate with other founders.
His customers “don’t even look at” competitors like Rippling once they do the incorporation, he says, because they will already have a bank account with Every and can easily add other modules. “So that’s our strategy,” he said.
The company is currently geared toward startups with fewer than 200 employees, not the growth-stage, deeper pocketed customers where his bigger competitors dominate. The software is intended to support them through their first five years.
The other crazy part is that Behera imagines that his fastest growing customers will “graduate off” of Every, at least until the day when Every itself is a growth-stage fintech with software that can handle bigger customers.
Y Combinator connection
But perhaps his true secret sauce is his Y Combinator connections.
Every was in the Summer 2023 cohort. Behera, age 42, didn’t need to learn the startup ropes at YC. He is best known for co-founding HR employee reviews company Reflektive and selling it to Learning Technologies Group in 2021 for an undisclosed sum, after it had raised over $100 million venture funding from the likes of Andreessen Horowitz and TPG.
He’s also husband to Surbhi Sarna, who founded and sold nVision Medical to Boston Scientific for $275 million in 2018. She’s now a YC adviser. So Every has grown its customer base by being close to the Valley’s preeminent startup factory. About half of its 150-ish customers come from YC’s network, Behera said.
Then again, Rippling, Brex, Gusto, and Deel are also YC alums who have access to the same YC network. So Every’s competition with these bigger companies is baked in as well.
Behera took two years off after selling his last company. “I did a company for eight years. I was pretty burnt out,” he said.
But in another possible sign of craziness, he’s doing another HR startup the hard way: Instead of partnering with other fintechs for modules, he and Peterson — his former head of engineering at Reflektive — coded all of their HR payroll and banking products from scratch.
Until two months ago, he did all the sales, customer onboarding of the first 50 customers, customer support, and product specs and designs himself.
Then help came, in the form of Bard, his seed investor from Redpoint. Bard called asking to lead the Series A (a “preemptive” deal, as they say in the VC world). Other VCs piled in because they were hearing from their portfolio companies who were already using Every, said Base10’s Dollaku.
“Rajeev told us what he was building, and we funded it for the Series A,” Dollaku said. “Many founders were using Every and that’s how many investors heard about Every in the first place. Because he wasn’t raising money. He didn’t need to.”
The Series A deal came together in about two weeks, Behera said. He wouldn’t reveal the company’s valuation but did say it was a standard 20% round, which, we calculate, should put the valuation around $112.5 million. Today he has about 20 employees and will use the money to hire and expand, primarily his engineering team, as well as to pay for the free incorporation and onboarding business model.
