Software start-up cashes in on $11 million to tackle wage theft crisis

This would give Yellow Canary a new business boost as organizations looked for ways to comply with the laws and show that they were doing all they could to do the right thing.

A better and smarter way

“If directors have somehow failed to understand the risks associated with wage theft and related issues, the election is likely to trigger systemic change in organizations, and they will turn to third-party service providers to help them ensure ongoing compliance,” Zeltzer said. mentioned.

“When the high-profile wage theft cases started making headlines, the only option employers had to review and recalculate what was owed to employees was through accounting firms … and we felt it had to there’s a better and smarter way.

“It is clear that every ethical employer in Australia should take every step to mitigate workforce compliance risks and be able to demonstrate this to their shareholders, boards and employees.”

— Grant McCorquodale, Executive Chairman, Parc Capital.

“Yellow Canary is taking an automated approach to this process and other similar processes in the area of ​​workforce compliance.”

Co-founder and chief technology officer Brenton McSweyn, who was previously a senior software engineer at Woolworths (which recently said its underpayment bill for wages reached $571 million), said the Yellow platform Canary could work with all the systems its customers used for payroll, time and attendance.

The company says its customers include ASX 100 companies and multinationals, but it cannot identify them in the media because it has entered into nondisclosure agreements.

New expansion opportunity

“Our platform’s algorithms can do the tedious work of calculations and enable employers to verify and meet their obligations in a truly efficient and scalable way,” McSweyn said.

Mr Zeltzer said the business did not have to seek financing to survive, as it was profitable from the start. It has already received funding from friends and family, but took fresh cash from an incoming Park bid as a way to accelerate its product development in new software categories expanded into the compliance space. of the work force.

Although currently focused on compliance with Australian labor laws, Yellow Canary is exploring opportunities for expansion in other countries where complex IR systems mean employers face similar compliance challenges. Mr. Zeltzer cited France, Germany, Vietnam, South Korea and New Zealand as examples.

While talk in Australian start-up circles lately has focused on the potential tightening of financing conditions and the reduction in valuations due to a US sale of tech stocks, Mr Zeltzer said that this does not It hadn’t been a problem during the Yellow Canary round, and he saw no reason to relaunch in the near future unless a new opportunity for acquisitions or expansion presented itself.

“We have been approached by a number of potential suitors and none have expressed concerns to us about the issues in the United States,” Zeltzer said.

“We are happy with the assessment and we reached an agreement on this very early in the negotiations.”

Park executive chairman Grant McCorquodale said he was comfortable investing in Yellow Canary because the ‘regtech’ company had a strong model in a growing market.

“We have put the Yellow Canary team and technology through an extensive due diligence process and are very impressed with the potential of this team, the technology and of course the tremendous market opportunity,” he said. .

“It is clear that every ethical employer in Australia should take every step to mitigate workforce compliance risks and be able to demonstrate this to their shareholders, boards and employees.”