Lifestyle Benefits Startup Raises Seed Funding After Pandemic Growth

The Evolution of Employee Perks and the Rise of Fringe

Many businesses currently utilize employee perks, such as discounts, commuter assistance, gym access, childcare support, and complimentary meals, to attract skilled professionals. However, the recent pandemic has significantly altered access to traditional in-office benefits.

Introducing Fringe: A Personalized Perks Marketplace

This shift has fueled substantial growth for Fringe, a startup offering companies a customized marketplace of benefits that employees genuinely value. These include popular services like Netflix, Uber, Airbnb, DoorDash, Headspace, Talkspace, and over 100 additional applications.

The concept for Fringe originated from the founders’ experience as financial advisors. They consistently observed individuals evaluating job opportunities based on their associated benefits packages.

The Cost-Value Proposition of Employee Benefits

Addressing the Imbalance

“Organizations allocate considerable funds to conventional benefits – often $800 to $1,000 monthly per employee. Yet, the perceived value for many employees remains relatively low in relation to the expense,” explains Jordan Peace, CEO of Fringe. “This led me to consider what companies could provide that would have a minimal actual cost but a substantial perceived value?”

He identified subscription services as a solution – offerings people frequently use but may find financially challenging.

How Fringe Operates

Employers subscribe to the Fringe platform, starting at $5 per employee each month, with potential discounts for larger organizations. Funds typically allocated to lifestyle benefits are then deposited into employee Fringe accounts, converted into points redeemable for various apps and services.

A Diverse Range of Benefits

Fringe’s Marketplace Offerings

The Fringe marketplace encompasses a wide array of benefits, including streaming platforms like Netflix, Spotify, Disney+, and Audible. It also features virtual fitness options, wellness programs, online therapy through Talkspace, food and grocery delivery services such as Grubhub, Uber Eats, Instacart, and Shipt, pre-prepared meals, and childcare solutions like UrbanSitter.

In the United States, Fringe partners with 135 service providers, with an additional 200 available internationally.

Negotiated Discounts and Rebates

Fringe’s business model centers on negotiating discounts ranging from 10% to 60% on these services, passing the savings onto employees through a points-back (rebate) system. Initially, the platform restricted spending to employer-provided funds, but user demand prompted the addition of personal spending options, driven by the appeal of the rebate program.

From Inception to Pandemic-Driven Growth

Early Stages and Initial Traction

Fringe launched in 2019, prior to the pandemic, experiencing gradual growth. By year-end, it had secured 15 clients, representing approximately 200 employees.

The Pandemic Catalyst

The COVID-19 pandemic dramatically altered the work landscape, prompting a surge in remote work and a corresponding increase in demand for Fringe. “Following the initial months of COVID-19, we experienced a 10 to 20-fold increase in inquiries,” Peace notes, as companies sought ways to support their remote workforce.

“We were ideally positioned to capitalize on this shift in the workplace. This isn’t merely a ‘pandemic perk’; even as we move beyond COVID-19, two-thirds of the workforce is expected to continue working remotely, signifying a lasting change,” he adds.

Expansion and Future Outlook

Growth in User Base and Team Size

By the end of 2020, Fringe had expanded its client base to over 70 employers, serving more than 12,000 users. Currently, the company focuses on organizations with 200 to 2,000 employees, enabling rapid implementation. Its clientele includes tech companies like Turo and Cornerstone OnDemand.

Fringe anticipates exceeding 100,000 users on its platform this year, alongside an expansion of its team, currently comprising around 20 individuals. Planned updates to the marketplace include automated point gifting, charitable donation options, enhanced Slack integrations, and improved navigation.

Recent Funding and Investment

Driven by this growth, Fringe has secured $2.2 million in new funding, led by Sovereign’s Capital, with participation from Felton Group, Manchester Story, the Center for Innovative Technology, and angel investors, including Jaffray Woodriff. William Boland, Senior Director of Corporate Development and Strategy at Mission Lane, has joined the board of directors.

This investment brings the startup’s total funding to $4 million.

Personalization and the Future of the Platform

The Value of Personalized Benefits

Fringe’s core advantage lies in its ability to personalize benefits to individual user preferences. Traditional employer-driven benefit selection, based on majority votes, often overlooks the needs of minority groups – those without children or those uninterested in gym memberships.

Beyond Employee Perks: Data and Expansion

Fringe envisions potential applications beyond employee perks, leveraging the wealth of subscription data it collects. Woodriff highlights the potential for data-driven insights into subscription choices and motivations.

“The marketplace’s potential extends beyond employee benefits,” Peace explains. “Our Series A funding will focus on exploring a significantly larger total addressable market. We plan to dedicate the next 12 to 18 months to developing concrete plans and building the technology to launch several new use cases.”