The biggest Series B raise in Australian history just tipped $111 million into workforce software startup Deputy

Deputy CEO and co-founder Ashik Ahmed Supplied
  • Deputy, a Sydney-based employment software company for casual workers, has raised $US81 million for its global expansion plans.
  • The Series B raise was led by the US venture capital company IVP, which previously backed Dropbox, Twitter and Slack.
  • The company currently operates in 80 countries, and counts Qantas and McDonalds among its clients.

Deputy, an Australian workforce management software startup, has set new benchmark for series B raise, pulling in $US81 million ($A111m) from US backers.

VC firm IVP, the Silicon Valley investment business that previously backed the likes of Dropbox, Slack and Twitter, led the round with support from OpenView.

Based in Sydney, Deputy has been around for a decade, and previously raised $US25 million ($A33m) in a Series A round backed by OpenView and Australian VC firms Square Peg Capital and EVP.

CEO and co-founder Ashik Ahmed said the business “was basically bootstrapped and self-funded” for its first eight years, but as global demand for Deputy’s software, which helps manage rosters and payments in casual workforces, grows, it was time to take the next leap.

“We’re now at a stage where we almost grow every month at same rate we did in first six years of the business,” he said.

The cash will go towards three goals, Ahmed said, starting with delivering more value to the existing 90,000 businesses in 80 countries who currently use Deputy to manage more than one million users.

An employee management tool, it simplifies scheduling, timesheets, tasks, and workplace communication.

“Everything we do is about saving time and money for our customers and we want to be doing more of that,” he said.

In Australia, Deputy’s customers include blue-chip clients such as Qantas, McDonalds, Aesop, Amazon, and Gelato Messina to manage the parts of the business where the workforce is paid hourly.

It’s popularity with the hospitality sector is such that “I don’t think you can go 100 metres in Sydney without bumping into a Deputy customer,” Ahmed said.

The business currently has 200 employees in the US, UK and locally, including 100 in the Sydney HQ.

Ahmed’s immediate focus is expanding Deputy’s product and engineering function, which currently has 50 people and is already on the hunt for 30 more.

“We’re looking to quadruple out number there in next 12 months,” he said.

He’ll also be turning his attention to the 2.2 billion people in the casual workforce worldwide as part of the company’s growth plan. To date, Deputy has rostered 200 million shifts, and facilitated over $30 billion in payroll payments.

“So many people don’t know about Deputy and we’re a global business,” he said.

“The opportunity here is huge: we envisage a day where every single shift being worked is powered by Deputy — and this funding allows us to build the best product and engineering team in the world that helps us get there.”

The other issue that’s caught Amed’s attention is the future of work.

With the rise of the gig economy and casualisation, the emerging workforce is also adapting to those demands and making their jobs suit their lifestyle as much as employers are seeking flexibility too.

“Our generation is becoming more a generation of instant gratification. The world of work will be no different,” Amed said.

“If the businesses of today don’t recognise the change that is happening, they will become irrelevant tomorrow.”

One of the problems Deputy solves is changes in the roster, giving employees the power to make changes with placing additional pressure on employers to find replacements to cover shifts.

“If I don’t want to work, I don’t want to make 10 different phone calls,” Ahmed said.

He recognised early on that the common thread was that everyone had a smartphone and their own way of engaging with their workplace, so Deputy, originally created to solve his own workplace issues, became that interface.

When he started the business in 2008 with Steve Shelley, they called it Deputy, because “we see ourselves as the second in charge” to an employer. One thing the pair had learned over the last decade is that they’re also the deputy to employees as well.

Seeking such a big raise was “scary” Amed admits, but he couldn’t be happier with the outcome.

“Having the backing and endorsement of IVP is a testament to the work that the entire Deputy team has put in to positively impact the future of work,” he said.

“They’ve backed some of the most exciting generational software businesses, and we’re delighted to be in such good company.”

IVP partner Eric Liaw joins Deputy’s board, and also has his eye of the transformation in work and sees the solution in Deputy’s technology.

“In a trend that started decades ago, businesses and workers around the world are moving towards flexible, hourly-based work,” he said.

“While this offers both businesses and employers greater freedom, the coordination of shifts and schedules presents an increasingly complicated set of pain points for workers and businesses. Existing solutions are antiquated.

“What impressed us the most is the quality of Deputy’s product. We spoke to many happy customers who were crying tears of joy at the benefits of Deputy. Hourly workers were similarly thrilled, they have more flexibility to work as many or as few shifts as they like, with more predictability.”

Square Peg Capital’s Paul Bassat said Deputy has “the potential to become one of the most exciting businesses produced in Australia: locally founded but global in its impact”.

And Ahmed is keen to keep Deputy an Australian business, despite its international push.

“You can build a great business in Australia when it comes to tech and the heart of Deputy is an Australian story and will continue to be one,” he said.

“We’re growing, and we want to help Australia’s STEM credentials grow with us. As part of our new funding, we’re going to build Australia’s best product and engineering team.”

And while he’s eyeing off the US market and especially New York, that city’s famed saying: “If you can make it here you can make it anywhere” has a special relevance when it comes to Australia’s fraught employment laws.

If you can make it work in Australia, the rest should be easy, Ahmed reasons.

“We have to find solutions to the labour laws of one of the most complex markets in the world in Australia,” he said.

“So America should be much easier task as a result.”