Wonolo, a staffing platform for blue-collar and labor contractors ‘left behind by Silicon Valley,’ raises $32M

A recent survey found that around 20 percent of all jobs in the US are held by contractors — people who take on work based on a particular project or fixed-term period, not as full-time, permanent employees. We’ve definitely seen that trend play out in Silicon Valley, both among the knowledge workers building tech products, and among the on-demand startups that rely on contractors to transport goods and people, clean homes and more. But it is also happening elsewhere.

Today, a startup called Wonolo, which has built a platform for workers to connect with businesses that need to staff up quickly specifically in labor-based roles in areas like retail, manufacturing and shipping — or, as it describes itself “other industries left behind by Silicon Valley’s future of work technologies” — has raised $32 million to meet the blue-collar demand.

The company says it now has 300,000 users registered on its platform, and it connects would-be workers with companies that include Coca-Cola, Papa Johns, and Uniqlo. Employees can post jobs “in seconds” with jobs filled “in minutes”, with payment processed after a job is complete (pricing is not disclosed). Wonolo also vets workers before onboarding them to the platform.

The Series C round was led by Bain Capital, with participation from DAG Ventures, Sequoia Capital, Base10, AMN Healthcare, and Cendana. Because VCs appear to be flush with money at the moment — Bain, for example, closed a $1 billion fund just last week — they are pumping a lot of it into the startups that look the most promising. Wonolo last raised money only seven months ago — a more modest $13 million led by Sequoia.

This latest round, the company said, will be used to expand its own staff (not clear if these will be contracted or salaried staff), as well as continue to expand its business.

The timing is important here. As of this week, we are now officially in the holiday period, which typically sees a seasonal bump in business that leads to the need for more temporary workers.

Companies hiring contractors might have in the past turned to staffing agencies to help fill that need — one kind of competitor for Wonolo.

These days, the rise of tech and an increasing prevalence of the contractor model has brought in a second track of competition — from Silicon Valley. Shiftgig is another startup that has created an efficient platform for would-be contractors to post their availability, and would-be employers to snap them up. (As a point of comparison, Shiftgig had some 15,000 workers and 1,500 companies/employers registered on its platform as of its last funding.) Uber has been trialling Uber Works for service contractors (wait staff, security, and so on). There is Flexy in the UK. And I wouldn’t be surprised at all if we see Amazon eventually turning its own temporary and contract staffing efforts into a wider business, given the pattern it has taken so many other products that it built first for its own internal use.

In that wider context, it’s not clear what Wonolo’s valuation is at the moment, but according to PitchBook the company had a modest post-money valuation of just under $48 million in April of this year. That would put Wonolo, at a conservative number, at just $80 million, but I’m guessing that the calibre of the backers, the rapidity of the funding rounds, and the size of the business speaks to that figure being higher. (Wonolo has now raised $60 million in total.)

Contract employment becoming more common comes with a number of tradeoffs. For the increased flexibility, and potentially strong income because you are filling an urgent need, you will often get less benefits with these roles, and far less job security. On the other hand, contract roles can become a very useful stopgap or top-up for people who either are between permanent roles, or simply want to take on more hours to bump their income (hopefully not at the expense of their health or home life).

“When we founded Wonolo in 2014, we had a two-part goal of solving the underemployment epidemic for Americans while simultaneously eliminating the temporary staffing shortage large brands face,” said Yong Kim, CEO and co-founder at Wonolo, in a statement. “Over the past four years, we have scaled our business model and built a thriving marketplace that connects hundreds of thousands of underemployed workers with the jobs they need. Bain Capital Ventures is providing us with the opportunity to put Wonolo’s technology into the hands of major Fortune 500 companies to help upend traditional staffing models.”

Wonolo cites stats from the Bureau of Labor Statistics that found that “the number of open positions in the United States exceeded the number of job seekers for the first time on record.” Specifically, five million Americans were found to be “underemployed,” where they were working less than 30 hours per week. A marketplace like Wonolo’s potentially helps those people top up their hours elsewhere.

“Wonolo is reinventing the way people find hourly work. Their technology platform creates more flexibility for underemployed workers and fills hiring needs for understaffed companies insanely fast and at a disruptively lower cost,” said Jamison Hill, senior principal at Bain Capital Ventures, in a statement. “We are excited to support the Wonolo team in pursuing their grand mission of bringing flexible and fulfilling work to everyone.” Hill is joining Wonolo’s board with this round.

Interestingly, while it seems that contract employment is a model that is here to stay, Wonolo appears to be focused also on giving people the experience and connections to eventually try to catapult themselves into more full-time positions.

“We thought we could address [the idea of being able to deal with unpredictability] better than temp staffing, and we realized the antidote was flexibility on the worker side,” co-founder AJ Brustein told us in April of this year. “We could match them with these jobs that would unpredictably pop up. When we dug into it, we realized flexibility was something that was just completely lacking for workers. We took a very different approach to the way that people will often recruit talent for staffing agencies or their own employees. We are looking at character traits.”

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