Crowdfunding Investors Back HRM Startup Xiggit

By James White | Sunday, 06 March 2022 | Startup, Business, Tech

Startup company Xiggit helps small business owners acquire and retain hourly employees through an affordable benefits platform. The human resources management (HRM) business recently launched a crowdfunding campaign to draw in new funding for its benefits platform.

Opening Up to New Investors

Xiggit is currently seeking funding from crowdfunding investors on the Republic crowdfunding platform. Over the course of the fundraising campaign, the HRM business hopes to secure at least $25,000 in new funding. With sufficient support from crowdfunding investors, the startup company is prepared to raise up to $500,000.

“We envision a world where every working American is on a path toward financial security,” said Carmela Abraham, co-founder and CPO of the HRM business.

Prior to launching a crowdfunding campaign, Xiggit found non-equity assistance from Massachusetts-based startup accelerator MassChallenge, as well as remote startup accelerator Newchip. The startup has also raised nearly $190,000 for its HRM platform from the company’s founders and other angel investors. According to Xiggit, the founding team has bootstrapped its initial prototype and pilot product.

The capital generated from crowdfunding investors will allow the startup business to continue to develop its HRM platform. Xiggit plans to use approximately 30% of the proceeds from the crowdfunding campaign to expand its team and acquire new talent. Additional funding will be devoted to developing the benefits platform and launching marketing campaigns to acquire new customers and build distribution partnerships.

Big Benefits for Small Businesses

Abraham founded the startup company in 2020 alongside entrepreneur Heather Dawson. Xiggit gives small business owners the opportunity to provide employee benefits to hourly employees and freelancers without the added administrative work.

To use the HRM platform, employers just need to enroll in Xiggit by connecting an existing payroll provider, banking information, and information about the company. Employees can then select the benefits that they would like to enroll in, and the platform automatically deducts appropriate funds from the payroll to the employee’s account.

Xiggit claims that its platform is able to provide benefits that are competitively priced when compared to outsourced HRM services. Additionally, it handles the administrative work and compliance associated with these benefits programs. 

The startup generates revenue from its platform through a subscription model, starting at $10 per subscribed employee. The fee may be paid by the employer, the employee, or split between both parties. Currently, Xiggit projects an average annual return of $2,000 per subscriber by 2025. The company also expects to break even by 2023.

Breaking Into the Growing Benefit Administration Industry

According to market research firm IBISWorld, the US benefits administration market is worth more than $200 billion. The industry is expected to grow 3.4% this year.

Xiggit will have to compete with a number of other HRM services in the industry offered by companies both large and small. Competitors in the field include names such as TriNet, Gusto, and Guideline.com. Since its founding in 2011, Gusto has raised more than $690 million from investors for its own integrated payroll and HRM services, while Guideline has amassed nearly $340 million for its 401(k) services.

About the Author

James White

James White is a Michigan State University graduate with a B.S. in Environmental Biology. He is interested in reporting emerging trends in technology, especially with regard to alternative energy and environmental conservation.