Pave Raises $100M Series C and Acquires Option Impact

Pave’s acquisition of Option Impact from Morgan Stanley increases our customer count to 5,700. This makes Pave the largest compensation provider for private companies in the world. Learn more here about the acquisition and new round of funding led by Index Ventures.

What is the most expensive item you have ever purchased? A house? A car? An investment portfolio?

If you are like me, you probably spent weeks (months?) scanning Zillow, Carvana, or Yahoo Finance to watch the real-time pricing fluctuations before making your purchase. These marketplaces may be painful–the current market downturn certainly isn’t fun. But, they are fair. Buyers and sellers have full access and control to the information needed to make their decisions.

What about the macroeconomy – what is the most costly item on Earth? Healthcare? Education? Military spending? Nope.

Roughly half of every single dollar produced in the world’s GDP goes towards employee wages. That’s correct–half of GDP is compensation!

Compensation is, simply put, the most expensive thing in the world.

Yet, compensation is the last major global marketplace without a real-time price.

“Compensation fairness” is a guessing game built on blind trust. Think about the last time you had to ask for a raise or negotiate a job offer. We have all been there. These conversations are highly uncertain, emotional, and extremely unfair due to the lack of universally available information to effectively inform decisions on both sides of the employer-employee relationship.

At Pave, we are building the record of truth for every compensation profile in the world.

Eventually, we will make this compensation graph universally accessible so that all 4 billion members of the global workforce can freely earn what they deserve.

Here’s the plan:

1. Build tools to get real-time compensation data from tech companies
2. Make the aggregated compensation data available to accelerate our acquisition of even more data
3. Seamlessly integrate the tools with the data to build the most intelligent compensation platform
4. Construct a universally accessible compensation graph from the data
5. Repeat steps 1–4 for all industries

Today, we are relentlessly focused on steps 1 and 2 and just starting to think about step 3.

Step 1 – Build tools to securely get real-time compensation data from tech companies

In April of 2020, we went through an intense interview to get Pave into Y Combinator. Covid had just started, so it was over Zoom. And I had failed a previous YC interview in 2019, so I was sweating bullets.

I came prepared with TAM analyses, product screenshots, and competitor breakdowns. But none of that mattered. For 15 minutes, I was drilled by the YC investment partners on one single question from 93 different angles:

“Why the &$(# did your early customers give you API-access to their HR data? This doesn’t add up.”

When the Zoom call abruptly ended, I found myself staring at a blank screen. I texted an early advisor: “Uhh I think I bombed that; they didn’t even ask about the business.”

Looking back, it makes more sense now. At the time, we had signed three early customers who had each integrated their respective Greenhouse, BambooHR, and Carta instances. This meant that by having signed 3 early customers, we had real-time access to salary, bonus, equity, and benefits information from over 1,500 employees.

Common wisdom would suggest that companies would not want to risk sharing their HR data with a 3rd party. Something didn’t add up to the YC partners. What is Matt hiding from us…?

But we had discovered the early signs of a contrarian thesis that would surprise most experts. If you build compensation workflow tools that address the most visceral compensation pain points, tech companies will actually integrate their HR systems.

Today, we have over 2,700 integrated customers. The early thesis was right.

The two tools that kickstarted our initial collection of compensation data were:

1. A compensation dashboard for candidates and employees called “Communicate”
2. A merit cycle tool for managers and executives called “Plan”

Step 2 – Make the aggregated compensation data available to companies to accelerate our acquisition of even more real-time data

Historically, it has been extremely difficult for tech companies to get the market data needed to confidently compensate employees. The primary datasets that customers have used are powered by manual upload processes which are error prone and ~6-12 months behind the market.

In December of 2020, we had around 25 customers. Just enough to bootstrap “step 2” of the plan, right?

Alongside our Series A fundraise, we confidently announced the plans for our “Real-time Benchmarking” product to the world.

Our premise was a bold “give-to-get” vision sell to the market: