Coverflex is a Portuguese platform that allows companies to offer their employees a flexible compensation system. In other words, employees can choose the type of compensation (health insurance, food, discounts or other benefits) that suits them best. According to the startup, such a system allows companies to cut costs and get tax benefits, and employees to gain more control over their compensation system.
After the Series A, the company has entered the Italian market and is expected to enter the Spanish market in the second half of the year. The goal is to reach sales of more than two million euros and exceed 10,000 paying users.
The startup is justified as the largest (most profitable) market, even though the flexible benefits market is fragmented and marketers and users have pain points regarding the solutions and tax benefits (for both employees and companies) offered to them by industry leaders.
A company has an opportunity to transform benefits management and improve employee satisfaction by utilizing new tools that make it easier for them to engage.
Coverflex is a direct competitor of Cobee, a Spanish startup that also offers flexible pay, which recently raised a $40 million round (with which it began its internationalization, but with its sights set on Mexico) and which is aiming to become a unicorn. The market for flexible remuneration and employee welfare is currently valued at €200 billion, of which Europe accounts for more than 40%. However, less than 20% of employees take advantage of these benefits as many companies, despite spending billions of dollars, only offer one-off reward packages.
Since its launch in 2021, Coverflex has been deployed in more than 3,600 companies such as Santander, Natixis, OysterHR, Bolt, Emma, Revolut and Smartex.
According to the company, the platform has 70,000 active users who use it on average more than 8 times per month and the company has processed more than €80 million in employee portfolios for its clients.
To support these operations and growth, Coverflex has about 100 employees in Europe and Latin America. With this round of funding, the company expects to grow to more than 150 employees by the end of 2023, primarily in product, sales and engineering.