HR tech company Coverflex has raised €15 million in its latest funding round as it looks to grow in Europe. Coverflex provides companies with a platform to manage their employee compensation and benefits, including health insurance and expense allowances.
Led by SCOR Ventures, the Series A round was joined by previous investors Breega, MS&AD, and angel investors, bringing Coverflex’s total funding to €20 million. The company’s platform, “Compensation OS,” streamlines benefits management by aggregating insurance providers and offering personalized, tax-efficient packages and a Visa card for employees.
Coverflex is among several start-ups seeking to simplify employee benefits management and compete with companies like Yonder, which raised seed funding last year to address the same issue.
The complexities of compensating employees across multiple jurisdictions has become increasingly prevalent with the growth of remote work. To address this challenge, the company was launched in 2021 and has been serving its home market. They now aims to enter the Italian market, dominated by established players, with its innovative solution. The successful completion of its Series A round confirms Coverflex’s strong product-market fit in Portugal and the significant opportunity for growth in Europe, especially in Italy, according to CEO Miguel Amaro. Despite recent pushback from merchants and users, Italy remains Edenred’s most profitable market globally.
“The successful completion of this funding round demonstrates the continued relevance of Coverflex’s approach to modernizing HR processes and providing a more customized compensation experience. With 70,000 active users and customers such as Santander, Bolt, Revolut, and Natixis, the Lisbon Startup is well-positioned to take advantage of the current opportunity for employers to transform employee benefits management and enhance employee satisfaction,” said Will Thorne, head of lead investor SCOR.
As a remote-first company, the startup has a team spanning Europe and Latin America, and it plans to expand its headcount as it grows internationally. In its first move into Italy, they aim to tap into the meal voucher and welfare market among employers in the country. According to Coverflex’s Italy manager, Chiara Bassi, the market is ripe for disruption, as current providers charge high commissions of up to 20% per transaction – the highest in Europe – and take 60-90 days to pay, causing restaurants and supermarkets to opt out of the system. This leads to limited options and low employee satisfaction, presenting a significant opportunity for Coverflex.