This would provide a further commercial boost for Yellow Canary as organizations looked for ways to comply with laws and show they were making every attempt to do the right thing.
A better, smarter way
“If directors somehow haven’t appreciated the risks associated with wage theft and related issues, the election is likely to trigger systemic change in organisations, and they will be looking to third-party service providers to assist with ongoing compliance,” Mr Zeltzer said.
“When the high-profile wage theft cases were starting to hit the news, the only option that employers had to review and recalculate what was owed to employees was via accounting firms… and we thought there must be a better, smarter way.
“There is a clear case that every ethical employer is Australia should take all steps to mitigate risks relating to workforce compliance and be able to demonstrate this to their shareholders, boards and employees.”
— Grant McCorquodale, executive chair, Park Capital.
“Yellow Canary takes an automation approach to this process and other processes like it in the workforce compliance space.”
Co-founder and chief technology officer Brenton McSweyn, who was previously a senior software engineer at Woolworths (which most recently declared its wage underpayment bill had reached $571 million), said the Yellow Canary platform could work with any systems its customers used for payroll, time, and attendance.
The company says its clients include ASX 100 companies and multinationals, but that it cannot identify them in the media, as it has non-disclosure agreements.
Fresh opportunity for expansions
“The algorithms of our platform can perform the grunt work of calculations and enable employers to check and make good on their obligations in a really efficient and scalable way,” Mr McSweyn said.
Mr Zeltzer said the company had not had to seek funding to survive, due to being profitable from an early stage. It has previously taken some funding from friends and family, but took the fresh money from an inbound offer from Parc as a way to accelerate its product development across new and expanded software categories in the workforce compliance space.
While its focus is currently on compliance with Australian workplace law, Yellow Canary is exploring opportunities to expand into other countries where complex IR systems mean employers face similar compliance challenges. Mr Zeltzer named France, Germany, Vietnam, South Korea and New Zealand as examples.
While talk in Australian start-up circles in recent times has been about the potential tightening of funding conditions and reduced valuations because of a US-led sell-off in tech stocks, Mr Zeltzer said this had not been a problem in Yellow Canary’s round, and he saw no reason to raise again in the near future unless a fresh opportunity for acquisitions or expansion rose.
“We had been approached by a number of potential suitors and none expressed any concerns to us regarding the issues being experienced in the US,” Mr Zeltzer said.
“We are happy with the valuation, and we reached agreement on this very early on in negotiations.”
Parc executive chairman Grant McCorquodale said he had been comfortable investing in Yellow Canary because the “regtech” firm had a strong model in a growing market.
“We put the Yellow Canary team and technology through an exhaustive due diligence process and are very impressed with the potential of this team, the technology and of course the considerable market opportunity,” he said.
“There is a clear case that every ethical employer is Australia should take all steps to mitigate risks relating to workforce compliance and be able to demonstrate this to their shareholders, boards, and employees.”