Employee leave startup Cocoon launches after raising $20M in new funding – TechCrunch

Employee leave benefits are an intricate web of company and government policies, and Cocoon strives to make both employer and employee experiences clear and simple.

The platform was launched on Wednesday in all 50 states and is designed for any type of employee leave such as parental, doctor, nursing, or bereavement leave. It takes into account all government and insurance services of the company and manages all facets of the vacation from compliance to claims management to payroll.

In addition to launching, the San Francisco-based company announced it had received $ 20 million in Series A funding, led by Index Ventures, involving First Round Capital, SemperVirens, XYZ, Magnify Ventures and a group of individual investors has applied. That brings the company’s total funding to $ 26 million, co-founder and CEO Mahima Chawla told TechCrunch. This includes a $ 5.5 million seed round with an index and first round in December 2020.

Chawla, Lauren Dai and Amber Feng founded the company in June 2020. The idea for the company arose from a conversation that Chawla and Dai had with colleagues and friends about vacation pay. They thought at the time that vacation was something like putting an absence on the calendar, but when they learned that it was more about navigating corporate, government, and insurance laws, especially how it worked in a particular company, who pays during a vacation and how it works, they saw the need to simplify the experience.

“Even extremely performance-friendly companies have a hard time,” said Chawla. “We’ve spoken to hundreds of employees and HR managers from all industries, and it’s a nightmare for everyone. We thought it shouldn’t be difficult for someone to take care of themselves. It affects everyone, but there is nothing that can make it easier, so we saw a great opportunity to make a difference. “

The Cocoon platform offers areas for employers and employees. On the employer side, it takes care of compliance and payroll complexes so that the company knows its responsibility for payroll, but does all of this work for the employer. The employee will go on Cocoon and create a vacation from start to finish using an automated process that Chawla says can be done in less than 10 minutes.

Since its launch in January, the platform has collected a wealth of data, including how employees use their vacation benefits and what they use them for, to provide insights for employers to understand how they can better perform their services.

Cocoon already works with big employers like Carta, and Chawla sees his responsibility in making the vacation easier. Other benefits companies are only tackling the vacation problem piecemeal, while Cocoon takes a holistic approach, applying software and automation to reduce the back and forth in administration for both employers and employees.

The new funds will be used for recruitment, particularly in the areas of engineering, sales and customer success, as well as for the development of additional products.

“We’re seeing massive incoming inquiries through customer referrals and broker relationships,” said Chawla. “Next year it will not only be about expanding the employer base, but also switching to different industries and employers of different sizes.

As part of the investment, Mark Goldberg, Partner at Index Ventures, joined the company’s board of directors. He says this investment was a personal one for him as he ended paternity leave and helped write the vacation policy for the company. In fact, one of his colleagues spent over 25 hours on the phone with the California Department of Employment Development during the first part of her maternity leave to get around a typo that threatened her job.

Goldberg has known the Cocoon team for some time and follows the co-founders from their previous positions at Square and Stripe.

“When Mahima called me and said the band was getting together, I wanted to join,” he added. “We’re looking for this core talent vortex. If you can find the DNA in the first 10 employees, the next 100 will be top notch. It’s similar to what we saw in the early Plaid team. “

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