Sorbet, an Israeli FinTech startup enabling employees to liquidate PTO for cash, secures an additional $15 million to a $6 million Seed round raised in April. The investment was led by Dovi Frances’s Group 11, with participation from existing investors, including: Viola Ventures, Meron Capital and Global Founders Capital.
Expanding down under
Sorbet is attempting to tackle a major corporate problem in the U.S. -- accumulated and unused vacation days. Workers in the U.S.A only take advantage of 72% of their paid time off annually; creating a big problem for both HR (burnout, quitting, drop in productivity, etc.) and for the company accountants. This is mostly due to companies accumulating PTO year-over-year (approx. 70% of companies in the U.S.), creating a collected debt of nearly $270 billion in their books -- average of $2,600 per employee.
Sorbet “purchases” the employer’s vacation commitment towards their employees, and liquidates them for immediate cash. This means that now employers owe the vacation days to Sorbet, and can determine exactly when it wants to pay it off -- alleviating the financial burden of high volume accumulated PTO.
On a technical level, Sorbet’s system integrates into existing enterprise systems, including payables, accounting, HR, and into the employee’s personal calendar. This helps the system analyze personal preferences, detect patterns in usage of paid time off, and better understand company needs and policy.
This data is used by the system to provide users with a complete analysis. Highlighting the days that are “locked up”, displaying the impact of these lost vacation days on the financials, and offering recommendations on optimizing PTO liquidation distribution.
The Sorbet system also offers an app for employees; suggesting when to take some time off and when it’s better to liquidate for cash. When an employee decides to liquidate their vacation days, the balance is charged on a Visa -- a Sorbet partner -- debit card.
Sorbet adds that the cash can also be redeemed for special offers, but employees are in no way encouraged or forced to spend the money with commercial partners of the Israeli startup.
While chatting with Geektime, Sorbet CEO and co-founder, Veetahl Eilat-Raichel, notes that the high demand from small and large businesses across different sectors in the U.S. was a key reason behind the round extension. “Additionally, we started receiving inquiries from companies outside of the U.S. market. We've identified massive market potential in Australia. At the same time, we had a lot of investors eager for another funding round, and we thought it was the right time to collaborate with strategic partners and raise more capital to accelerate growth,” adds Eilat-Raichel.
Along with the new investment, and mentioned by the CEO, Sorbet also announces its expansion into a new market -- Australia. The Sorbet platform is expected to be highly valued by the Australian market, where labor laws allow employees to accrue PTO indefinitely.
Sorbet was founded by CEO Veetahl Eilat-Raichel and CPO Eliaz Shapira. The Israeli startup has 28 employees -- 16 in Israel. Sorbet just emerged from stealth two months ago with a $6 million Seed round. The capital will be used to recruit talent to help with global expansion in the U.S. and now in Australia.