Exclusive: Embedded payroll startup Salsa raises $20M
Illustration: Tiffany Herring/Axios
Salsa, a startup providing embedded payroll infrastructure to vertical SaaS platforms, raised $20 million in Series A funding, CEO John Kramer tells Axios exclusively.
Why it matters: Vertical SaaS platforms have been steadily adding various financial services to their suites, but many still lack a payroll offering.
Zoom in: Altos Ventures led the round, which included participation from SemperVirens, Greycroft, Definition, and Better Tomorrow Ventures (BTV).
- New York-based Salsa has raised $30 million since being founded in 2021.
How it works: Salsa provides an API-based platform and a library of UI components that enable vertical SaaS platforms to quickly launch and offer payroll as a feature to their end customers.
- It also handles all the compliance, money movement, tax filings and payments on behalf of its customers.
- The company is licensed to offer payroll in all 50 states and Canada.
Context: Before Salsa, Kramer was the COO of HoneyBook, a client relationship management platform for independent businesses.
- "At HoneyBook, we couldn't build a better payroll product for our customers because it is too big for one company to build. There's too much compliance and operations [work]," Kramer says.
- Coming full circle, Kramer says HoneyBook recently became a Salsa customer and launched its payroll product in 17 days.
Follow the money: Salsa has also signed up platforms like Jane, Maple, Mangomint, GlossGenius and Paid.
State of play: Salsa competes with startups like Check, which has raised about $120 million since being founded in 2019, and Zeal (fka Puzzl), which has raised nearly $30 million (including a $15 million round led by Portage last October).
- Payroll, HR and benefits giant Gusto, meanwhile, has raised about $750 million and is increasingly leaning into offering its platform as an embedded solution.
