Kadmos, a migrant worker salary payment platform, raises $29.5 million – TechCrunch


Companies across the industrial spectrum often rely on migrant workers, with data from the International Labor Organization showing that about 169 million workers go abroad for work. But being far from their home jurisdiction and financial infrastructure presents many challenges, including what is perhaps the most important part for the employee themselves: how to best get paid.

From the company’s perspective, at the same time, they may have to pay for workers from many different locations, many of whom are on temporary or short-term placements.

Managing all of this administration and ensuring that workers are compensated on time is more difficult than most outsiders might imagine. And the German startup is a problem Cadmus sets out to provide an end-to-end platform solution that helps employers remove the friction and many costs associated with paying their cross-border workforce.

Just four months after the announcement $8.5 million seed funding roundToday, Kadmos revealed that it has raised another €29 million ($29.5 million) to the basket through a Series A tranche led by Blossom capital, with participation from Addition and Atlantic Labs.

The problem

Given that migrant workers are, by definition, away from home for the specific purpose of work, they must also be able to spend what they earn. Sometimes they can get cash, which means they can spend the money locally, but then they can face huge remittances when it comes to taking the money home with them. In addition, many migrant workers need to send money home to their families, which is often their main reason for working abroad, and they can again be hit by significant cash transaction fees.

Alternatively, a company may choose to pay its workers through intermediaries such as local banks, money transfer companies, agencies or other third parties, which involves not only a lot of fees but also significant paperwork and delays.

A little over a year since its inception, Kadmos is already working with shipping companies that use an early iteration of its service to pay their seafaring workforce.

How does it work?

For employers, Cadmos provides a Centralized salary payment platform to make and track payments regardless of where the employee is from.

Cadmos for employers

As for setting this all up, the employee must of course work for a company that has decided to use Kadmos. The employer installs them through their own dashboard and the employee receives a link to download Kadmos and register.

On employee sideKadmos delivers a mobile app complete with an e-wallet that stores workers’ wages in USD or EUR while allowing them to send money home instantly with predictable set fees. And importantly, Kadmos also provides employees with their own debit card linked to their digital wallet.

Kadmos mobile application

Instinctively, limiting payments to euros or dollars may be a bit on the restrictive side, especially given that migrant workers are likely to come from any number of countries around the world and travel to just as many countries. However, co-founder Sasha Makarovic noted that the shipping industry mainly pays in those two currencies.

“The industry’s current needs are mostly in USD and EUR, because those are the currencies that seafarers are paid in,” Makarovic told TechCrunch. “It is a significant benefit to seafarers to keep their wages in ‘hard currency’ (ie stable currency).”

This, of course, means that workers will likely have to transfer money frequently, either when spending or when sending money home. And that’s where Kadmos’ 1% sub comes into the fray, which Makarovich says compares to the typical 1.5-4.5% that traditional banks might charge. So if they use their debit card to spend dollars/euros in a country with a different currency, they will automatically be charged at the Kadmos rate.

However, if the company expands into other areas in the future, is there an opportunity for Kadmos to offer options for employees to be paid in other currencies?

“Yes, we are looking into those possibilities,” Makarovic said.

Modern fintech

In fact, Kadmos epitomizes the modern fintech movement. It has many advantages of a modern challenge bank such as Monzo, in addition to cross-border payment features that are similar The likes of Wise or money transfer platforms such as Remitly. But according to Justus Schmuser, Kadmos’ other co-founder, the bottom line is that it no just another B2B or B2C fintech. it was created to solve a very specific problem.

“Cadmos’ approach can be classified as B2B2C,” Schmuser said. “In this regard, our scalability and cost of acquisition are much more efficient, as acquiring several different employers who use Kadmos to pay their employees can lead to thousands of new end users of the Kadmos app.”

By tackling two problems at once, helping migrant workers get paid and easing costs and administrative burdens for employers, Kadmos is in a pretty strong position as the world continues to emerge from lockdown and return to normal business.

“We want to make the payment process easier for companies and at the same time make it easier for employees to receive and spend that money,” Schmuser added. “Kadmos’ focus is really on using technology to address the severe restrictions placed on the financial freedom of cross-border employees.”



Source link

Leave a Reply

Your email address will not be published.