Employee recognition is a key retention tool in a competitive jobs market. According to a recent SurveyMonkey poll, 82% of staffers consider recognition an important part of their happiness at work, while an equal percentage -- 82% -- report feeling happier overall as a result of receiving (presumably deserved) work recognition. It's not just employees who see the value. In an industry poll, 56% of HR leaders told the Society for Human Resource Management that employee recognition programs help with recruiting top talent.
Perhaps it's unsurprising, then, that startups facilitating employee recognition and the doling out of merit-based rewards have gotten a lot of investor attention. WorkAngel, a mobile-first employee reward and recognition platform, has raised millions of dollars to date from prominent VC backers. So has Fringe, which is developing an HR employee benefits platform with customizable perks.
Another vendor in the space is Bonusly, which was launched in 2013 by founder and CEO Raphael Crawford-Marks. The startup today announced that it raised $18.9 million in Series B funding led by Ankona Capital with participation from Access Venture Partners, Next Frontier Capital and FirstMark Capital -- bringing its total raised to $32.4 million.
"I ran Bonusly as a side project for a couple of years prior to raising a seed round, and grew the company organically until 2020 when the company raised its first round of funding," Crawford-Marks told TechCrunch in an email interview. "Since our Series A, we have seen our valuation more than triple, despite the multiple compressions that have occurred in today’s market -- a strong recognition of the value we already provide and the even greater opportunity that lies ahead."
Bonusly’s platform attempts to capture and analyze data on how organizations work and connect, informing HR teams and managers. Every month, employees get an allowance to give small bonuses to their colleagues to recognize their contributions. Bonuses appear in a feed so everyone can see the work happening across their team.
As for the bonuses, they can be spent on gift cards from popular brands like Amazon and Hulu, as well as on cash and charitable donations. Crawford-Marks says that Bonusly users receive an average of two recognitions from peers and managers every week.
Image Credits: Bonusly
"Our platform and data put us in a unique position to enter the performance management space with capabilities that are extremely difficult for the competition to duplicate," Crawford-Marks said. "We don’t think there’s value in adding features like 1:1 or OKR templates that everyone else has. Instead, we want to lean into and expand upon what people already love about Bonusly."
Of course, there's a risk that platforms like Bonusly become a popularity contest. An MIT study found that merit-based rewards have the potential to actually increase bias and reduce equity in the workplace.
Crawford-Marks argued that Bonusly's requirement that recognition contain a written reason and be tagged with a company value or goal prevents explicit -- or implicit -- biases from getting in the way. "Given Bonusly enables positive communication at work that is focused on effort and achievement, rather than personality, it can actually mitigate any notion of a popularity contest," he added.
Crawford-Marks also asserted that customers were generally happy with Bonusly's platform, pointing to the growing subscriber base.
"As of the end of January 2023, we have 3,175 current customers and 396,813 current users," Crawford-Marks said. "After deploying Bonusly, more than nine in ten Bonusly customers see improved employee engagement, 88% see a morale increase and 89% experience better employee satisfaction."
Take those stats with a grain of salt. But what you can count on is continued technical improvements to the platform -- at least according to Crawford-Marks. In the near term, the focus will be improving Bonusly's analytics capabilities; recently, Bonusly introduced new tools that make it clearer how each department and team is using Bonusly and how that compares to benchmark usage across Bonusly's clientele.
Crawford-Marks says that Bonusly is also in the process of expanding its rewards catalog, adding non-U.S. redemption options in addition to travel and experiences "at scale." AI is another area of exploration for Bonusly -- specifically AI to "spotlight work that might have otherwise gone unnoticed" and "encouraging peer-to-peer recognition to promote stronger team connections," Crawford-Marks says.
When asked about potential economic headwinds ahead, particularly in regard to funding, Crawford-Marks stressed that Bonusly is "capital efficient" and "knows how to make every dollar count to grow." However, he declined to say whether the company plans to add to its 108-person workforce before the end of the year.
"The value we deliver to customers has become even more critical as organizations navigate the inevitable changes characterized by the need to be more efficient coupled with the on-going 'great resignation' and tight labor market," Crawford-Marks said. "It’s a platform that empowers real-time recognition to highlight accomplishments big and small in a very positive and public way ultimately fosters stronger cultures and builds resilient companies that weather the storm."