Wonolo Scores $32M to Expand Blue-Collar Gig Workers’ Marketplace

Xconomy San Francisco — 

Wonolo, which runs a marketplace where companies can find fill-in staffers for jobs like stocking store shelves and warehouse chores, announced Monday that it raised $32 million in a Series C funding round led by Bain Capital Ventures.

Bain Capital also invested this year in another tech startup focused on blue collar workers: UpKeep, which created a system to help companies and their technicians manage their maintenance work orders.

Wonolo started as a project inside The Coca-Cola Company (NYSE: KO), which was having trouble finding merchandisers to keep its products stocked up at retail outlets, says co-founder and COO AJ Brustein. The startup spun out of the big beverage company in late 2014, with the aim of organizing the gig economy for a wider range of blue-collar workers. It kept Coca-Cola as a customer, and says it has added thousands of others, including Papa John’s (NASDAQ: PZZA) and Uniqlo.

San Francisco-based Wonolo unveils its funding boost as the hiring season is in full swing for holiday temporary workers—and when staffing up could prove challenging because the low U.S. unemployment rate is making the labor supply tight. Even so, Brustein says, many employed U.S. workers are looking for extra shifts to make ends meet, because their full-time positions pay too little, or they can only get part-time positions at their current workplaces. These “underemployed” workers make up Wonolo’s fastest-growing pool of jobseekers, and seem to perform the best in their temporary shifts, he says.

The startup says it has filled hundreds of thousands of jobs, but Brustein says exact numbers are not being disclosed. Most of Wonolo’s activity is now focused in San Francisco and seven other major markets: the northern and southern regions of California, New York City, Chicago, Dallas, Atlanta, and southern Florida. The company has set up a second headquarters in Nashville, and with its new capital it plans further expansions within the United States. Other investors participating in the Series C round were Sequoia Capital, DAG Ventures, Base10, AMN Healthcare, and Cendana Capital. The new round brings Wonolo’s fundraising total to $60 million. The startup has about 65 employees in the United States, plus another 70 in the Philippines and Vietnam filling engineering and operations support roles, Brustein says.

Companies seeking to hire Wonolo workers set their own pay rates, but they must be above minimum wage—a Wonolo requirement. The hourly pay varies by the assignment, but averages about $14 an hour, Brustein says. Wonolo charges the hiring companies its own additional fee on top of the wages paid to the workers. The fee is calculated as a percentage of the money paid to the worker; that fraction is typically about 45 percent when the worker is classified as an independent contractor, he says.

Workers can choose to be classified as independent contractors or as employees of a Wonolo subsidiary, Frontline Work, which sends them W-2 forms and makes the usual paycheck deductions for taxes and other items. Wonolo’s customers also have the choice of hiring workers classified as either Frontline’s employees or as independent contractors.

Wonolo has onboarded about 300,000 jobseekers, who must download the company’s app and keep their smartphones on to receive notifications of the jobs up for grabs. Wonolo pre-screens applicants using Social Security traces and a number of other national, state, and county databases, which include criminal history records and terrorist watchlists, Brustein says.

Information the company doesn’t look at includes the jobseeker’s credit history and educational background. Although employer HR departments routinely collect this data, Brustein says it doesn’t predict a worker’s performance in a Wonolo assignment.

“The thing that really matters is attitude,” Brustein says. Wonolo tells workers they’ll get top ratings from employers if they score well on the company’s “five P’s.” Those traits are: prepared, professional, positive, polite, and punctual, he says.

Along with underemployed workers, Wonolo provides options for occasional temp workers such as college students and parents who work part-time, as well as unemployed people who need flexibility in their work schedules because they may be caring for an aging parent, for example. Some unemployed people work five days a week at Wonolo’s temporary assignments, Brustein says. The average length of a Wonolo job is about seven hours, or one shift, he says.

Brustein says the system can schedule a worker for an open shift in an average of four minutes. Jobs for an evening shift may be filled earlier the same day. But not all jobs are snapped up, he says. Wonolo sends companies an immediate notice if the pay offered is too low to attract workers in a particular locale, and recommends higher payment or other changes to make the position more desirable.

Wonolo also tries to solve the problem that may have led a company to seek a fill-in worker in the first place: a regular company employee doesn’t show up, or calls in sick at the last minute. Wonolo keeps track of its workers’ locations via their smartphones, and sends them reminders when they’re scheduled for an upcoming shift, as well as traffic advisories if a highway snarl might make them late, Brustein says. If a Wonolo worker is running too late to be on time, or has to cancel due to a last-minute problem, the company can auto-post the job to see if another worker can show up, he says.

“We know it will happen, so we built in a fix,” Brustein says.

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