HR and payroll startup Sprout gets $6m injection from NY-based Point72 Ventures, others

Sprout, a payroll and human resources platform from 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.

The deal marks Point72’s first foray into Southeast Asia.

The team / Photo credit: Sprout

New participating investors include Next Billion Ventures out of New York, Dymon Asia out of Singapore, 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 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.

“99% 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’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.

Diving into analytics

But in Patrick’s mind, Sprout has always been a data company. “Data is where the real value is and we have a ton of it,” he says.

As such, Sprout has been working on a more ambitious feature: predictive analytics.

“It was a no-brainer for me that the next phase should be helping our clients future-proof their businesses as the artificial intelligence wave comes in,” he continues.

The new feature allows HR managers to see trends in the workplace, from what the company’s attrition rate is to how much it’s paying for overtime and who’s in the office in real time. It has a Google-like search engine feature that allows HR staff to type in any query, and then the information comes up in ad hoc reports.

But that’s nothing compared to what Patrick envisions the improved software can do. He says Sprout will soon be able to help companies figure out why solid employees quit and even predict when they will leave. It will also be able to recommend concrete steps to address the problem. “This will have a profound impact on businesses in the long term,” he says.

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