Cobee raises 41Mlns for Spanish employee benefits super app

Cobee, based in Madrid, is on a mission to revolutionise the employee benefits industry. The start-up has just secured €40 million in new capital to further develop the product in existing and new markets, making employee benefits and well-being a standard for modern businesses.

FACTS

• The company raised €40 million in a Series B funding round co-led by Octopus Ventures and Notion Capital, with participation from previous backers Balderton Capital, Speedinvest and Dila Capital.

• Cobee is based in Madrid and is currently expanding in Spain and Portugal. The objective of the fundraising is to expand to other Spanish and Portuguese speaking markets in Latin America, starting with Mexico, as well as other countries in Southern Europe.

• It focuses on small and medium-sized companies and has around 800 clients including Ogilvy, Booking, Workday, N26, JTI, Job & Talent, Avis, Línea Directa, Michelin, Petronas and Glovo...

• Cobee currently covers benefits programmes for: meals, transport, childcare, training, gift cards, rent, life and health insurance, and soon a wider range of wellness options that are increasingly part of employers' benefits offering (and expectations).

• On average, employees use their payment cards 10 times a month, a number increased by the fact that meals and transport are paid with the card.

CHALLENGES

• Improved customer experience: Cobee's strength is their flexible platform, which can be adapted to different types of companies and countries with little friction. Employees use the app to browse and select the benefits they want to use and activate them. In cases where physical commerce is involved, they receive a card that can be used to pay for them.

• A 'must-have': Increased competition and mobility in the labour market has transformed employee benefits from a "nice to have" talent attraction and retention tool to a "need to have" talent attraction and retention tool

• Quite different schemes in different markets that make internationalisation more complicated: In some countries, companies are required by law to provide meals or lunch vouchers to employees; In some markets, employers provide optional health insurance, while in others this may be the primary means of providing insurance. Some may also offer discounts for various services such as gym memberships or purchases from certain retailers or professional training.

MARKET PERSPECTIVE

•  Several players are capitalizing on the digitalization of the employee benefits business and the current economic climate, which favours the implementation of qualitative programs: Forma in the US raised $40 million this year; Perkbox has made a name for itself in the UK; Caju and Flash are battling it out in the Brazilian market.

• In France, Swile raised funds from SoftBank last year at a valuation of $1 billion and has expanded into Brazil with the acquisition of Okarit and Sodexo is enjoying a position as a global hospitality giant.