Portuguese hrtech startup Coverflex has raised €15 million in a Series A funding round that will see the company launch its compensation solution in Italy as well as strengthen its position in Portugal.
Coverflex’s €15 million Series A round was led SCOR Ventures with Breega, MS&AD, Armilar, Stableton, BiG Start Ventures, and Shilling participating Angel investors include Firmin Zocchetto, Job van der Voort, Nuno Sebastião, Humberto Ayres Pereira, Hugo Arévalo, Alessandro Petazzi, Davide Dattoli, and undisclosed others.
“In the current macro environment, this Series A round validates our ambitious vision, product-market fit in Portugal and a market opportunity in Europe, especially in Italy - Edenred’s most profitable market in the world despite having a strong pushback from both merchants and users recently,” says Miguel Amaro, Coverflex CEO. “This round confirms that our focus on adapting human resources processes to the current demand for a more personalised compensation experience is more than relevant today.”
Founded in 2019 by Luís Rocha (ex-TUI Musement), Miguel Santo Amaro (ex-Uniplaces), Nuno Pinto (ex-Kide) and Rui Carvalho (ex-Unbabel), Coverflex is addressing this cookie-cutter problem. The customisable solution allows employers to go beyond the “traditional” and powers up health insurance, meal allowance, fringe benefits, and discount programmes.
Dubbed “Compensation as a service”, Coverflex offers customers, and their employees, in turn, a VISA card, app, and company-defined budgets and options. In addition to cost savings, Coverflex is also positioning its service as a recruitment tool, hoping to attract the best talent by offering such flexibility.
According to the company, since launching in 2021, their wares are in use by more than 3,600 companies including Santander, Natixis, OysterHR, Bolt, Emma, Revolut, and Smartex, culminating in year-on-year growth of over 400 percent.
Coverflex counts some 70,000 active users, who use Coverflex more than 8 times on average per month, and has processed more than €80 million to their customers’ employees’ wallets.
While the company now has close to 100 employees working across Europe and LatAm, the Italian market expansion seems ripe for the picking. Coverflex Italy country manager Chiara Bassi explains, ““In Italy, fees go up to 20% per transaction, the highest in Europe for this kind of market. Current providers charge high commissions and pay in 60-90 days, which leads to restaurants and supermarkets opting out of the system. Fewer options equal lower satisfaction for employees, which is why this is a huge opportunity to disrupt the market.”