Brazilian HR Startup Flash Raises $22M Series B Funding

Flash Secures $22 Million in Series B Funding

Flash, a rapidly growing startup focused on modernizing employee benefits in Brazil, has successfully closed a $22 million Series B funding round. The investment was spearheaded by Tiger Global Management.

Investor Participation

Existing investors also contributed to this financing round. These include Monashees, who previously led Flash’s Series A funding, Global Founders Capital – initial backers during the seed stage – as well as Citius and Kauffman Fellows.

Company Origins and Mission

Established in 2019 by Ricardo Salem, Guilherme Lane, and Pedro Lane, childhood friends, Flash aims to overhaul the traditional benefits landscape within Brazil, South America’s largest economy.

A Modern Benefits Platform

The São Paulo-based company has developed a flexible benefits management application, coupled with a Mastercard. This innovative solution is designed to supersede the historically prevalent, and often restrictive, meal, food, and transportation “vouchers.”

Addressing an Antiquated System

According to Salem, the initial focus was on reimagining the mandatory benefits dictated by Brazilian labor law. “For years, four established companies, largely controlled by banks, dominated the market with outdated products and substantial profit margins, often leading to exploitative practices,” he explained.

Empowering Employee Choice

Flash expanded its offering by enabling companies to customize their benefits packages. This allows employees to select and manage their benefits according to their individual needs through the Flash app and associated card, as highlighted by Salem.

Demonstrated Growth and Traction

The company’s progress indicates a strong market fit.

Since its launch, Flash has onboarded 4,000 companies, encompassing startups, small and medium-sized enterprises, and large corporations.

Exponential Expansion

Last year witnessed a remarkable “10x” growth across all key metrics for Flash. The platform’s user base surged from 10,000 to 100,000 employees. This year, that number has already climbed to 250,000. While specific revenue details remain undisclosed, Lane confirmed that customer growth is directly correlated with the company’s Gross Merchandise Volume (GMV).

Furthermore, Flash’s team has expanded significantly, growing from approximately 50 to 200 employees in the last eight months.

Adapting to Changing Needs

During the onset of the pandemic, when companies sought ways to assist employees with expenses like utilities, Flash swiftly responded. Salem stated, “We developed a feature within our app that could scan utility bill barcodes or QR codes, facilitating payments.” This addition proved to be a highly popular benefit.

Introducing an Incentive Platform

Building upon its existing capabilities, Flash has also integrated an incentive and rewards platform within its wallet.

Market Potential and Future Plans

Despite achieving considerable success, Flash currently holds only a 1% market share, indicating substantial growth potential. The company envisions itself as a versatile solution, rather than being limited by geographical constraints.

Focus on Brazilian Market

“Our immediate focus is on addressing further pain points for companies operating within Brazil,” Lane stated.

Broadening Appeal

Salem noted the initial appeal of Flash was primarily among modern technology companies. However, last year demonstrated that the platform’s benefits extend far beyond this segment. “It’s valuable for all employees, from tech professionals to blue-collar workers and even CEOs. Everyone benefits from flexible options tailored to their lifestyles and needs.”

Early Investment and Vision

Fabricio Pettena of Global Founders Capital led Flash’s seed funding round in 2019. He had been actively seeking disruption in this sector for an extended period.

Identifying a Market Opportunity

Pettena observed that the Brazilian market, due to its regulatory environment, often resulted in unfair practices towards businesses like restaurants. He shared with TechCrunch, “Incumbents were really ripping off restaurants and others.”

Immediate Recognition of Potential

Pettena immediately recognized the potential of Flash. He stated, “The Flash team proactively engaged in regulatory changes to enable flexible benefits, rather than simply reacting to them. Within just 15 minutes of our first meeting, it became clear that we shared a common vision for how this disruption would unfold.”