Sorbet has raised $21 million in funding, the most significant seed round for a FinTech business in Israel.
In April, the company reported closing a $6 million round, which has been increased to $15 million. Dovi Frances’ Group 11 led the round, with participation from existing investors, including Viola Ventures, Meron Capital, and Global Founders Capital.
Employees can use Sorbet’s platform to convert unused Paid Time Off (PTO) into cash. The value of underutilized PTO in the United States alone is $270 billion. Employees frequently cannot cash out their PTO until they resign or are terminated. Employers view this wasted PTO value as a cash flow liability on their balance sheet.
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Sorbet founded in 2019 by Veetahl Eilat-Raichel (CEO), Eliaz Shapira (CPO), and Rami Kasterstein.
Veetahl formerly worked at Bank Hapoalim as the Head of Retail Marketing and at Isracard as the Head of Marketing and Customer Experience. Eliaz was most recently Co-Founder and CEO of Oneder, a prominent educational platform specializing on special education. Rami has been involved in the information technology industry for almost three decades as a serial entrepreneur and investor.
Even before the COVID-19 epidemic, 28% of PTO in the United States remained underutilized. This issue became much more acute during the epidemic since an increasing number of people began working from home. Employees were just unmotivated to take Time Off, and managing PTO for companies rose dramatically during the pandemic. This lack of motivation to take Time Off is predicted to endure, even as the pandemic draws to a close.
Sorbet connects with and syncs with organizations’ existing calendar’s human resources and payroll systems to track and analyze time management practices. Sorbet then starts proactive suggestions for individualized, pre-approved 3-6 hour “Micro Breaks,” 1-4 day “Micro Vacations,” and +1 week vacations tailored to the employees’ specific interests and do not interfere with their job.
Sorbet accomplishes this by increasing Time Off utilization by an average of 15% and forecasting the part of Time off that the employee will never use and will accrue.
Once Sorbet offers to buy out an employee’s unused PTO, it is able to refinance these liabilities for businesses, allowing them to manage their cash flows better, save on financing costs, and enhance tax deductions. A clear and demonstrable win-win situation for everyone.
When everyone could use some extra cash, employers can provide an incredible financial benefit to their employees without incurring a huge cash expense.
Cashed-out days are loaded onto a virtual prepaid card. They can use it anywhere and unlock highly curated experiences and activities via brand partnerships, enabling employees to do anything from upgrade to business class, book a spa treatment, or enroll in an online course paid for with their unused PTO.
Along with the additional finance, Sorbet is expanding its operations from the United States to Australia, where labor laws allow employees to accrue paid Time off forever – a significant problem for any Australian business – to which Sorbet can contribute value.
The company now employs 28 people, 16 of whom are located in Israel. This year, Sorbet will hire hundreds of additional staff, the bulk of whom will be based in Israel, with others joining the company’s US and Australian divisions.
Dovi Frances, Group 11’s Founding Partner: “At Group 11, we take pride in our uncanny ability to unearth tomorrow’s unicorns.
Veetahl and his team accomplished an extremely difficult task: they discovered a large market inefficiency that was lying in plain sight. With a $270 billion market opportunity in front of me, it was crystal clear to me that now was the moment to accelerate and not look back.”
Veetahl Eilat-Raichel, Founder & CEO, Sorbet: “It’s clear that we’re in the midst of a tectonic shift in employer-employee dynamics, and with inbound global interest exceeding our wildest expectations. I had the great privilege of picking the best investors to assist us in expanding and speeding up.”