Blog

More than 80% of the world’s workforce, some 2.7 billion people, do not spend their days in front of computers, and that has led to a strong disparity when it comes to technology, with some 1% of IT investment targeting them as users. That’s been changing very rapidly with the rise of smartphones and apps, and today, one of the startups that’s seen its business boom as a result of that trend is announcing some funding to jump on the opportunity.

Flip, which makes a communications app for frontline workers to chat with each other, to get communications from management, and to carry out HR activities like swapping shifts, has raised $30 million. The startup — based out of Stuttgart, Germany, and used primarily in the German-speaking DACH region — will be using the funding to break into new markets, starting with the UK, CEO and founder Benedikt Ilg said.

Notion Ventures and Berlin-based fund HV Capital are co-leading the round, with previous backers Cavalry Ventures and LEA Partners, along with individual backers including Volkswagen chairman Matthias Müller and many others.

There are a number of other apps in the market targeting the same sector of the world’s workforce, and the same use case around communications: they include Workplace from Meta, Teams from Microsoft, Crew (now owned by Square), Blink, Yoobic, When I Work, Workstream, and many more. In fact just today Snapshift, another frontline work app focused mostly on the HR side of the opportunity, announced funding too.

But there are three things to be said about what looks like a crowded field. First, it’s a big and fragmented enough market that there will likely be several strong players in the mix for the long haul. Second, there are still a number of ways that each player might evolve and innovate as the market is still fairly new. (One area that has been notable for Flip, Ilg said, is that his app is strictly compliant with GDPR rules, which has helped it win business over others that might claim that they are too, but are in fact not.) Another area is even more basic: making the app easy to use, not just in terms of user interface and experience but actual app size, the space it takes up on one’s phone and the bandwidth it needs to be used.

“I worked in production at Porche before starting Flip, and I know how it feels, the lack of communication with management,” Ilg said. “We are the most simple application in the field, when it comes to downloading and using it, with the least amount of screens. This is the spirit of what we want to build, doing things for end users.”

And third, if critical mass is important for success, Flip is actually leaping out into the front.

Flip to date has amassed 200 customers, spanning some 1 million users, with the list including McDonald’s, Rossmann, Edeka, Magna, and Mahle. In the pandemic — a moment where frontline workers suddenly did appear front and center in people’s consciousness — its revenues have boomed, shooting up six-fold in the last year, Ilg told me. (The startup is not disclosing actual revenue nor valuation.)

For those following the space, you might have noticed a story we wrote the other week about how Workplace had been hoping to announce McDonalds as a customer but had held off. Flip’s engagement with the company currently totals some 60,000 people. Given that the fast food giant is already working, publicly, with Flip… it will be interesting to see how the Workplace deal pans out. In any case, it underscores just how much there is left to play for here.

The app today is primarily used by employers to communicate to their wider base of employees, people who move around during the day and typically will not be working in a single location. Those people also use the app to communicate with each other, mainly for productivity purposes: to swap shifts or check a payslip, but not to carry out functions directly related to their work. This is an area where rivals like Yoobic have been building features, and Ilg said that Flip is also starting to look at how it might, too.

“Flip offers a chance for every deskless employee to truly participate in their own company’s communication process. There is huge potential in actively integrating these employees. We look forward to supporting Flip with our expertise and experience as it expands in the English-speaking market,” said Jos White of Notion Ventures in a statement.