Fresh from their recent participation in IdeaSpace’s latest accelerator cohort, HR platform Betterteem is now seeking $500,000 in pre-seed funding to further develop their AI-powered offering into a market-ready product. According to the team, their goal is to onboard their first 10,000 paid users and achieve monthly recurring revenues of $20,000 by the end of Q3 this year.
Betterteem is an AI-powered workplace app that uses machine learning to improve workforce management. With an initial focus on Business Process Outsourcing (BPO) firms, the startup says employers can use their tools to reliably predict employee churn and provide on-demand mental health support, all managed through a digital employee community platform. By integrating third-party workplace communication and HR services like Slack, MS Teams, HRIS, and Sharepoint, Betterteem hopes to gather enough data to create comprehensive snapshots of an employee’s work experience.
“Our machine learning technology can analyze unstructured data from periodic pulse surveys, annual employee surveys, team chatters, and utilization of our employee-facing features,” said Founder and CEO Bo Discarga. “Hundreds of thousands of exchanges and user behaviors can be analyzed by our algorithm, which we then digest and supply to our clients, so they can monitor trends in employee satisfaction and retention in their organization.”
Discarga first came up with the idea of an employee rewards app in 2017, along with co-founder and CTO Rey Dumasig. Discarga, an employee experience professional, brought years of experience working for companies like Bank of America, Startek, Accenture, Quantrics, and JPMorgan Chase, helping build sustainable plans to improve worker morale and engagement. With CTO Dumasig’s expertise in tech infrastructure and data security—as well as his experience as a tech consultant for startups—the two got to work on Kaboom, the first iteration of what would eventually become Betterteem. While the platform was well-received for its simple and effective design, the bootstrapped team quickly ran out of funding.
“I had no idea about getting outside funding back then, so Rey and I decided to put the idea on hold,” Discarga said. “We parted ways. I returned to my corporate job, but never lost communication. When finally ‘startup’ became a buzzword in the Philippines, Rey founded his startup in his province. When I got introduced to it, I reached out to him and asked if he wanted to join forces again.”
“Initially, I only thought of building something that would streamline the employee rewards processing for the BPO company that I worked for,” Discarga said. With his limited knowledge of building websites and some help from watching YouTube Tutorials, Discarga launched a prototype called MyRewards. The tool gained traction in his workplace and opportunities for new functionalities began to emerge. His company was asking for more ways to track and manage employee experience, eventually leading to MyRewards transforming into VIBE, a rewards and experience app. Before long, Discarga realized the potential for a comprehensive toolkit capable of turning all the data he was gathering into actionable insights for a company. Reunited with Dumasig, he got to work on Betterteem.
According to latest industry reports, BPO firms see annual turnover rates between 42% to 50%. That’s a disparaging figure compared to the 3.1% cross-industry average turnover rate the Philippine Statistics authority recorded in the first half of 2021. As a result, BPOs spend anywhere between $230 to $800 per employee, per month on employee experience subscriptions.
“Though the systems created decades ago by Gallup and IBM Kenexa were reliable options to measure employee satisfaction, the reality is that there are no specific benchmark data to define why employees are leaving their organizations,” Discarga said. “I started Betterteem to become the industry leader in defining the specific drivers of employee experience and retention in the BPO sector in the Asia Pacific Region. We want to develop consumer-grade features that employees would love.”
“We realized, however, that for us to be successful in this market, we will need to start winning in the outsourcing capital of the region—the Philippines. The Philippine BPO sector accounts for about 18% of the global outsourcing market and about 30% of APAC’s. So, for the next two years, our goal is to be successful in the Philippine BPO industry.”
With early backing from angel fund Buko Ventures, Betterteem aims to cater to the 960,000 workers employed across the local BPO industry. Discarga values their total addressable market in the Philippines at $92.8 million, with a cumulative annual growth rate of 3.2% through 2028. “The success in the Philippines will then be our use case in bringing Betterteem to a new market in different sales territories in APAC,” he said.
Currently, Betterteem’s existing clients are all engaged on the platform on a free trial basis. The team is looking to raise $500,000 in pre-seed funding to further develop the platform and get it ready for paid users. “We see the growing number of new data privacy regulations as a challenge for our business,” Discarga said. “Since our business is heavily reliant on collecting data, navigating data compliance will continue to be a challenge for us. What makes compliance more challenging is that there are no general regulations to comply with, so we would have to tailor-fit our compliance per territory we are serving.”
Once the platform is ready, users will be billed roughly $2 per active user, per month.
“We believe that our AI-powered solutions will be the default expectation of the market we serve over the coming years,” Discarga said. “This is based on the firm belief that digitizing HR is not just a ‘nice to have’ but a necessity for their organization’s future growth and acceleration.”