The changing workforce has been something of an obsession since the rise of Uber and its many imitators. While 1099 contractors were not a new idea that on-demand introduced to the economy, the sudden surge has notably been a more recent phenomenon.
The on-demand economy draws out a lot of polarizing opinions — and many more moderate ones in between — but the focus of the conversation is generally on lower-skilled workers.
Labor advocates argue that the 1099 economy is essentially exploitative, and allows startups to enjoy all the benefits of a full-time workforce without having to provide those employees with the benefits the law requires they give to full-time workers.
Entrepreneurs argue that advocates are pushing protections and restrictions that the bulk of their workforce doesn’t want or need, and in so doing forcing 21st century businesses into 20th century employment models that can only end in bankruptcy.
And when the shape and future of the on-demand workforce comes up, this debate has a tendency to take center stage and draw the flashiest of public statements.
“The much-touted virtues of flexibility, independence and creativity offered by gig work might be true for some workers under some conditions,” Sen. Elizabeth Warren (D-MA) noted in a recent speech, “but for many, the gig economy is simply the next step in a losing effort to build some economic security in a world where all the benefits are floating to the top 10 percent.”
We will leave the merits of Warren’s remarks up to greater minds than our own to debate, but we would note that it tends to pull the conversational focus to a specific low-skill segment of the “gig economy” workforce while sort of ignoring those workers under specific working conditions who might benefit from the flexibility, independence and creativity offered by gig work — or high-skill workers like developers and programmers that are in short supply and high demand.
The team at Boston-based HourlyNerd is entirely focused on such high-skill workers, and making sure the firms that want them can have them. And given its recent $22 million Series C Round, it seems that investors are pretty focused on such workers as well.
How It Works
HourlyNerd is at base an on-demand staffing company that is betting that firms are ready to rethink how they are employing people.
“If you think about a company today, it’s structured in the same way as 100 years ago,” company co-CEO and co-founder Rob Biederman noted in an interview.
But Biederman bets that century-old institutional structure isn’t well suited to the needs of either modern firms nor modern workers, both of whom are essentially looking for more flexibility and less upfront commitment.
Its core service is providing its increasingly large customer base with programming and other types of skilled staff on a short-term project basis, thus reducing the staffing and recruiting resources used in-house.
The Newest Funding
HourlyNerd’s $22 million Series C round was a big uptick from previous efforts which had collectively netted $12 million. Investments this time around were led by General Catalyst Partners, with participation from Highland Capital Partners, GE Ventures, Mark Cuban, Greylock Partners and Bob Doris of Accanto Partners.
Currently, HourlyNerd staffs 65 employees full time and is claiming roughly 10 percent of the Fortune 500 as its customer base. Those firms include Pfizer and GE (who invested in the round via GE Ventures).
The Week In Investments
June ended on a strong note, and $6.1 billion in total activity could be said to heat things up. The bulk of activity, as has been the trend, has been to have FinTech bear big deals that added up, even if they occurred in the traditional arena of banking proper.
The biggest deal of the week came as Canadian Imperial Bank (otherwise known as CIBC) said it would buy Private Bancorp, based in Chicago, for $3.8 billion. The acquisition is among the biggest thus far in banking and represents a good 31 percent premium to Private Bancorp’s share price.
Also pushing high on the ranks was Security Bank, which saw $782 million come from Bank of Tokyo-Mitsubishi in a 20 percent stake sale. The $400 million and change being paid by People’s United Financial for Suffolk Bancorp offers some diversification beyond Connecticut.
Looking at the close of the second quarter we find that through the year to date, total investment activity has been to the order of $20 billion, and then some, with a sizable tilt toward FinTech and, within that, banking.