Rosaly lands 10 million euros from American funds

Rosaly lands 10 million euros from American funds

By Philippe Guerrier | the | Payroll outsourcing

With the support of Fin Capital, an American fund specializing in FinTech, Rosaly wants to open several countries in Europe by the end of 2024, roll out its product roadmap and expand its team. Details with Arbia Smiti, President and founder of Rosaly.

Arbia Smiti, President of Rosaly, bets on an extensive bouquet of financial education services. – © DR

“We must always evangelize the market and educate HR managers on the benefits of on-demand wages”, evoked Arbia Smiti, CEO and founder of Rosaly.

To continue its efforts in this direction, Rosaly raises 10 million euros from a pool of investment funds led by Fin Capital.

In April 2021, the start-up obtained its first financing of 1.5 million euros. A few months after the creation of the publishing company Leonsia.

For this round of funding completed at the end of August 2022, the pool of venture capital companies includes:

  • The Treasury VC (United States),
  • Haymaker (USA),
  • FJ Labs (USA),
  • LeFonds VC (France, United States),
  • Clocktower (USA),
  • Kraken Ventures (UK),
  • Auxxo (Germany).

“We are pleased to lead this new fundraising round from Rosaly, to help provide the European workforce with digital access to wages, financial education and wellbeing,” evoked Logan Allin, Managing Partner of Fin Capital (leader of this €10 million fundraiser), who is joining Rosaly’s board of directors.

“We have invested in DailyPay, the first player in this category in the United States, and we are convinced that Rosaly will become the leader in Europe. »

Fundraising: “complicated timing” (Arbia Smiti)

• “The period has become difficult for the financing of start-ups. We were unlucky with the timing. We did a wide round of VCs who are more selective in files. We are solid on our side between the apprehension of the market, the KPIs, the technologies and the progress of our product roadmap. »

• “Our pool of investors, many of whom come from the United States, have real expertise in Fintech. For a number of them, including the leader Fin Capital, this is their first investment in a French start-up. This is proof of the attractiveness of France in terms of Fintech, alongside the United Kingdom. However, I made it clear to them that Rosaly was not targeting the United States market. They are confident in our ability to ramp up in Europe. »

• “During our search for financing, the French funds proved cautious with the change in the more difficult economic context but also because of a poor understanding of our market. »

Rosaly’s three main goals

“With our digitized salary deposit solution, we are helping companies in Europe to improve the financial well-being of employees”, summarizes Arbia Smiti.

3 objectives will serve as a compass:

  • open up to Europe (Italy, Belgium, Netherlands, Germany) by first supporting large group customers from France and then by opening subsidiaries.
  • rolling out the ‘product’ roadmap which is “ambitious”.
  • accelerate recruitment technological, commercial, product development and marketing profiles. The team is expected to grow from 25 to 35 people by early 2023.

Rosaly has 150 client companies and 10,000 monthly users of its application.

Geographical expansion: priority to customer support

“Depending on the ‘go to market’ with a sufficient number of customers and the need for on-site support, we will set up local subsidiaries for prospecting between 2023 and 2024”says Arbia Smiti.

Rosaly has clients with international activities such as:

  • Bertrand Group (hotels, restaurants),
  • Zephyr Group (personal services),
  • an entity of the Carrefour group, Powaka (restaurant chain),
  • Bleu Libellule (hairdressing and beauty equipment and products).

Product: heading towards savings and banking services

“Our initial positioning is not the payroll installment feature. We offer an employee financial wellness benefits package that includes on-demand pay and financial education.

In addition to the salary deposit, we have integrated into our application:

  • a budget coaching feature with an alert system before users fall into the red.
  • an anti-discovery shield to activate,
  • making an appointment for social assistance »evokes Arbia Smiti.

“Between the end of 2022 and the beginning of 2023, we will release a savings product and we will issue a bank card. »

Rosaly wants to develop as many products as possible internally but relies on a dozen Fintech partners to develop new ones in the field of banking-as-a-service (in particular via the start-up Swan) or open banking.

Rosaly has signed partnerships with:

  • payroll software publishers such as ADP (integration and distribution of the solution via its marketplace),
  • GTA software publishers such as Horoquartz or Bodet Software,
  • providers of employee and social benefits solutions such as Sodexo, UP Group, Bimpli in the process of merging with Swile.

HRD and down payment: a market that still needs to be educated

“We want to make it easier for HRDs to make payroll advances. The process is fully digitized and automated on payroll software »says Arbia Smiti.

  • Employee side, the payslip is automatically edited. A “salary deposit by Rosaly” line is generated with the appropriate final balance when processing the payslip.
  • Business sideit reimburses the deposit paid by Rosaly during the month through a bank transfer or direct debit.

“In a context of crisis and inflation, Rosaly goes from being a ‘nice to have’ to a ‘must have’ in business. The HRDs are interested in it, but also the unions. The important thing is that the company agrees to offer this service to employees. The adoption time is long from the HRDs and we must first create trust”according to Arbia Smiti.

Inflation: “assumed” impact on the economic model

Rosaly relies on a BtoBtoC model:

  • A fixed subscription system per month and per employee which is supported by the company. Regardless of the uses of the application and the amounts advanced to generate the salary installments.
  • The service is free for the employee who is the end user.
  • Behind the scenes, the start-up ensures the progress on cash for the current month to the client company for the management of salary installments. It relies on direct agreements with the main banking networks which supply the financial flows necessary to respond to requests for deposits from Rosaly’s client companies.

Arbia Smiti admits that the current rise in interest rates linked to inflation has ” an impact “ on the economic model but it is necessary to take into account “engineering” and “innovation” of Rosaly’s model.

  • “We don’t advance the money directly with our balance sheet but with banks as financial partners. It’s different from the credit system where interest rates can rise quickly. We are not experiencing the same increase because the financial flow is different. »
  • “There are no variables that the client company has to put up with. His subscription remains fixed. It is up to Rosaly to assume the risks of its costs by financial modeling. »