Startups, Investors Bet on Remote Work Future

Remotebase, a two-year-old San Mateo, Calif.- based startup that connects businesses with remote software engineers, is seeing revenue growth this year of up to 30% a month, co-founder and Chief Executive Qasim Salam said. Annual revenue last year surged by roughly 600%, he said. Mr. Salam didn’t disclose the company’s revenue.

Mr. Salam said the company recently surpassed 60,000 engineers in its online remote-work platform, up from 11 when the company launched in 2020, many living in India, Pakistan, Nigeria and Eastern Europe. Last week, Remotebase announced a pre-Series A $2.1 million fundraising round, led by Indus Valley Capital and Hustle Fund, with participation from Soma Capital, Angel Squad and Draper Associates.  

“Investors are super-pumped on remote,” Mr. Salam said. “They know it’s going to stay.”

Other, later-stage remote-work startups are fetching hundreds of millions of dollars in investing rounds, drawing high-profile Silicon Valley investors.

Chicago-based startup Atlas, whose tech platform helps employers comply with local employment rules and regulations for remote workers in more than 160 countries, announced $200 million in new funding from Sixth Street Growth, the growth investing business of global investment firm Sixth Street. 

“Employees realize that they have options when it comes to working,” said Atlas CEO Rick Hammell. “They can now be based in the U.S. and work for a German company,” he said. Atlas helps companies onboard, manage and pay a global workforce, he said.

“Companies that don’t figure out how to do remote work well will get crushed by companies who do,” said Chris Herd, founder and CEO of remote-work startup Firstbase. Based in Aberdeen, Scotland, Firstbase in March raised $50 million in a Series B refunding round led by Kleiner Perkins and included funding by Andreessen Horowitz.

Firstbase charges companies a monthly fee to equip homebound workers with ergonomic chairs, desks, laptops, monitors and other office gear, ordered over its platform. Launched in 2019, the company had some 600 corporate customers on a waiting list when Covid-19 struck in March 2020. Within months the list had ballooned to more than 4,000, the company says. 

Since early 2021, Mr. Herd said, revenue has grown 20 times larger, while the company has been adding more customers and expanding its team. 

Remote, an aptly named San Francisco remote-work startup, in April closed a $300 million Series C round—at a $3 billion private-market valuation—with funding by Sequoia Capital, Accel, Index Ventures, Two Sigma Ventures and General Catalyst, among others.

“Remote work is a durable phenomenon,” said Ravi Gupta, a partner at Sequoia who led the firm’s investment in Remote. “The demand for global hiring has taken off as many companies shift to a remote-first or hybrid model,” Mr. Gupta said. 

Founded in 2019, Remote provides payroll and compliance services for global workers and contractors in more than 150 countries, the company said.

“Despite the call by some employers for workers to come back to offices, we just closed our biggest month on record and our biggest ever quarter,” said Remote co-founder and CEO Job van der Voort.

Some 64% of more than 650 U.S. executives surveyed in October by PricewaterhouseCoopers—including finance and human resources leaders, as well as chief information officers and chief technology officers—said their company needs as many people back in physical offices as possible. That is up from 59% in August 2021, PwC said.

At the same time, corporate spending on remote-work technology is expected to reach $352.6 billion this year, up from an estimated $332.9 billion in 2021, according to IT consulting and research firm Gartner Inc. Spending is forecast to reach $381.5 billion by the end of next year, Gartner said. 

“There is no future in which we will work less internationally or less digitally,” said Andreas Klinger, founder of Remote First Capital, a venture investing firm that has investments in more than a dozen remote-work startups, including Firstbase. “Any company of sufficient size is essentially a distributed team in denial,” Mr. Klinger said.

Adam Riggs, founder and CEO of remote-work startup Frameable, said most employers now want workers to return to physical workspaces because they believe remote-work starts and ends with videoconferencing: “That’s only one piece of virtual interactions,” Mr. Riggs said. 

Frameable, which launched in 2021 and operates entirely remote, provides a platform that recreates an entire office space on a computer screen, with meeting rooms, work areas and cafes where employees can see each other interact. Mr., Riggs said Frameable currently has hundreds of commercial customers, who rent its software with rates varying by the number of users. 

“I may be a bit biased, but I absolutely believe remote work is here to stay,” said Remote’s Mr. van der Voort.

Write to Angus Loten at [email protected]