Sprout Solutions, a payroll and human resources platform based in Manila, has raised a US$6 million series A round, led by New York-based Point72 Ventures, the early-stage VC firm of American billionaire Steve Cohen. Series A round investments signal huge potential for growth for startups.
The deal also marks Point72’s first foray into Southeast Asia.
New participating investors include New York’s Next Billion Ventures, Singapore’s Dymon Asia, and Endeavor Catalyst, the investment vehicle of Endeavor, an organization that supports entrepreneurs with potentially high social impact.
Existing investors Kickstart, Beenext, and Wavemaker Partners returned for this fresh round, signaling growing confidence in the startup.
Sprout Solutions was founded by husband-and-wife duo Patrick and Alex Gentry in 2015 to solve a royal pain point for businesses operating under the Philippines’ complex labor laws.
“Ninety-nine percent of Filipino employees get paid according to the hours they work. What makes it difficult is we have 32 different pay permutations – whether you’re working day or night shift, weekends, or holidays. HR staff get stuck with this a lot,” says Patrick.
Add government compliance to the mix, and it becomes a nightmare. In the Philippines, businesses are required to file employee taxes, social security contributions, as well as corresponding reports. “The reports are tedious. If you make even one mistake, the government system will kick it back to you. It doesn’t tell you what the mistake is, so if you have thousands of employees, you have to dig through all those files,” he explains.
Sprout Solutions’s cloud-based software stores all employee information, automates timekeeping and payroll, and takes care of the necessary filings – reducing the time and energy HR personnel spend on these tasks.
Sprout Solutions has recently passed the strict audit requirements for ISO 27001 certification, the international standard for managing risks to the security of information a company holds. “When you have a reservoir of data, it comes with huge responsibility. We want to show clients that our processes are sound and we’re a responsible processor of their information,” says Patrick.
With its series A, the company will further develop its technology, expand its client base, and grow its now 240-strong team.
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