Why We Invested in Wonolo

Independent contractors, or gig workers, have been a steadily increasing share of the overall workforce since the 1980s, and today they represent 1 in 6 workers at large enterprises. Nearly every industry relies on short-term workers — to meet seasonal demand, provide specialized expertise, or drive sales.

On the labor side, over 70% of the 1099 workers surveyed in a 2020 study by ADP said they were working independently by choice and would continue to do so for the next few years. In a world where the alternative to a job as an Uber driver is no longer a union job at GM but instead a part-time job at Subway, workers receiving a W-2 are not living in a world of stable employment, and the flexibility and autonomy that independent work provides is attractive.

However, this segment of the labor force is underserved today by both technology and policy. In his thoughtful history of temporary work in America, Louis Hyman proposes a vision of the future where staffing algorithms could optimize for the needs of both workers and employers. Workers could input their desired work hours, adjusting for their personal needs (such as childcare), and be matched with jobs across employers. This would shift the current dynamic, which only optimizes for the employer’s needs, to enable workers to match those needs while also creating varied, flexible careers that fit with their lives.

Enter: Wonolo. Wonolo’s product is creating a fundamentally better customer and worker experience for the 70M+ hourly workers in the US, helping to efficiently match underemployed workers with good jobs and recognize and reward them for strong performance. The $500B+ global staffing market is largely analog, and Wonolo has a significant head start in the light industrials sector, which has come under increased pressure from labor shortages even as it has seen massive growth during COVID. Wonolo’s marketplace is uniquely able to rapidly spin up labor supply for businesses at short notice, enabling them to meet demand they would not have been able to otherwise. We heard from multiple customers that Wonolo had been transformative for their business, and has helped them operate nimbly in an increasingly uncertain world.

On the labor side, Wonolo is committed to ensuring all workers on the platform earn a Living Wage. Workers are paid within a few days of completing a job and can earn “badges” to differentiate themselves for high performance and earn even more. Wonolo is building an ecosystem to support workers with portable benefits through Wonolo Up. We ran a survey of current gig workers, and 50% of those who had used Wonolo rated it as a tool they “couldn’t live without,” more than double the share of workers who rated competitors at similar levels.

At G2 we have been building our thesis on B2B/B2B2C marketplaces, and have invested in a number of them to date, including Arcadia, ProducePay, and Fictiv. In the context of that work we believe that Wonolo is building a very valuable platform by quickly matching fragmented, heterogeneous supply with unpredictable demand from massive sectors experiencing secular growth. We were impressed with the scale of opportunity ahead for Wonolo, the quality of their metrics, and the analytical rigor across the team.

People are always at the core of what we do, and a customer we spoke to described everyone he’d interacted with at Wonolo as having been “kind, creative and competent,” elevating his experience with the company from a sales engagement to a true partnership. In Yong we found a truly inspirational leader for whom people would “walk through walls” to build a great, enduring company.

At G2, we invest in companies transforming traditional industries to make them more sustainable, efficient, and fair. We’re thrilled to be partnered with Yong and the entire team at Wonolo as they build the platform to empower the underserved gig workforce. If you’re excited to help build the future of industrial work join Wonolo — they’re hiring!

TechCrunch article: https://techcrunch.com/2021/10/19/wonolo-raises-140m-for-its-staffing-platform-used-by-1m-laborers-and-front-line-workers/

Yong’s blog post about the fundraise: https://www.wonolo.com/blog/wonolo-raises-138-million-in-new-funding-to-reshape-the-future-of-working