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California-headquartered Finch, which provides an API to connect employment data, today announced it has raised $40M in a series B round of funding. The company said it plans to use the capital to grow its team and extend its coverage of employment information systems, expanding to new data verticals.
Digital transformation has changed the face of employment systems. Enterprises across sectors face the need to connect payroll, HR and benefits data as they implement new strategies and deliver new products. This could be anything, starting from a loan or rewards program to something as simple as basic financial planning. When it comes to gathering this data, teams today often rely on ad-hoc internal solutions or iPaaS solutions (like Mulesoft, Workato and CloudSnap) that offer integrations across a broad swath of data systems.
Internal solutions are typically built using SFTP (secure file transfer protocol) servers or CSV upload scripts that often lack standardization across companies, and are brittle as a result. They demand significant team efforts for maintenance and quality assurance. Meanwhile, with iPaaS integrations, customers have to work with the providers on a case-by-case basis to build custom solutions for their needs. There is no standard offering.
In comes Finch employment data API
To address this gap, Finch provides enterprises with a unified API that makes it possible to access organization-wide directory, payroll and benefits data across more than 200 payroll and HRIS systems — through a single integration.
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B2B applications just have to embed Finch into their product and map various endpoints they want to consume. Then, whenever an end user wants to access or try their product, like applying for a loan, they just have to authorize access to their payroll or HRIS via a secure authentication flow. Once the authentication is complete, Finch’s integration with the employment data system allows read/write access to specific data based on the specifications of the end user.
According to Jeremy Zhang, CEO and cofounder of Finch, the software minimizes the need to build integrations in-house and reduces the users’ deployment time from six weeks to 24 hours. It also cuts down onboarding support costs. Companies can see around $500,000 in annual cost savings with this solution, he suggested, while noting that over 2 million employees have already been connected through the platform.
“Our biggest differentiator is our focus on employment data. We’re able to offer compatibility with hundreds of systems due to our multifactor approach. It allows us to be compatible with APIs, SFTP, and report generation–connectivity methods, while abstracting it all away for customers via a unified API,” Zhang added.
The company also claims to have put strict data security practices in place to encrypt information being pulled from different employment data platforms. This includes layering-on additional levels of access management and internal audits.
Tip of employment data iceberg
With this round of funding, which was led by existing investors General Catalyst and Menlo Ventures, Finch’s total capital raised comes close to $60 million. The company said it has seen 12-times revenue growth since its last round in June 2022, and will use the fresh capital to continue this momentum.
First, Zhang said, Finch will expand its reach to more payroll, HR and benefits systems, growing into new employment data verticals like benefits administration and new functionalities such as automating payroll operations. Simultaneously, the company will focus on growing its engineering, product and success teams to support demand and expand into new markets, starting with Canada, the U.K. and the EU.
“HRIS and payroll data is only the tip of the employment data iceberg. We expect to expand into other verticals where APIs are scarce, and build connectivity that allows innovators to understand the entire employee life cycle. These are the hardest to build and, frankly, require industry knowledge — we have in-house payroll specialists — in order to accurately map data and key workflows,” the CEO noted.
According to Allied Market Research, the global API management market was valued at $2.2 billion in 2021 and is projected to reach $41.5 billion by 2031, growing at a CAGR of 34.5% during the period.
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