When it comes to funding and investors, one could say that local tech startup Sprout Solutions, which provides human resources (HR) and payroll management solutions, is in full bloom.
Recently, the company closed its Series A round and raised approximately $6 million of capital from investors such as Point72 Ventures, a US-based investment firm that chose Sprout as its first foray into Southeast Asia; Dymon Asia; Next Billion Ventures; and Endeavor Catalyst. Sprout’s existing investors, such as local firm Kickstart Ventures and Singapore-based firms Beenext and Wavemaker Partners, also took part, after participating in the company’s late 2017 seed round that raised $1.6 million.
Patrick Gentry, CEO and cofounder of Sprout, credits this achievement to one key factor: the strong foundation of trust that they were able to build with their clients, and within their company.
“Growing a business in the Philippines from scratch is nothing like in Silicon Valley,” says Gentry, who established Sprout together with his wife, Alex, four years ago. “The trust barrier here is so high, so you really have to focus on overcoming that obstacle before you start to see any success.”
And to the couple, the success of their business doesn’t just equate to profit. Alex says their goal, early on, was to “swing for the fence,” or make a big impact on the HR industry.
“I think it’s important for [startup] founders to really internalize what their goal is. Patrick and I really had to think about it. When we finally decided, okay, we’re going to swing for the fence, we also said, we’re okay to give up a little bit more equity, a little bit more control of the company, to bring in employees, partners, investors—to potentially create a more valuable business,” Alex says.
“But we do have a clear path to profitability,” she adds.
The software-as-a-service company main mission is to help address pain points surrounding back-end processes involving HR, payroll and recruitment. To date, they have introduced end-to-end processing and seamless automation of 201 file management; attendance tracking and management; and compliance with government regulations, including automation of 21 different payroll-related government forms. They also have a product specifically tailored for the needs of small and medium enterprises, which have 50 or less employees.
Over 75,000 employees from hundreds of companies are now in Sprout’s system; by 2023, Gentry says the goal is to have a million employees. Its latest round of funding is also enabling Sprout’s nationwide expansion. The company currently has offices in Manila and Cebu, and by next year will open more in Clark and Davao.
The Gentrys see this recent funding as a win not just for Sprout, but for the Philippines’ whole tech startup industry, which two years ago couldn’t attract the attention of such investment.
“We looked to the West [for funding] in 2017, but no one was interested. Two years later, the level of interest is incredibly different,” Gentry says. “It’s a major signal that the Philippines is a rising star in the investor landscape.”