Rise: Innovating Global Payroll for a Borderless Future
With the increasing shift towards a borderless workforce, Rise is pioneering a new wave of change through its innovative, compliant, and globally connected payroll solutions.
In an increasingly interconnected world, Rise's mission is straightforward: enable businesses to compliantly onboard international workers without the need for a local entity or expertise in working laws, taxes, and other regional complexities.
Businesses based in one country, such as the US, can effortlessly hire a contractor from a different country, like Brazil, offer insurance, benefits, and pay them in their local currency, all without establishing a local entity or dealing with currency conversions. By offering a streamlined platform that simplifies onboarding, ensures compliance, and manages payroll for global workers, Rise is revolutionizing the way businesses handle their international workforce.
The innovative payroll and compliance solution began as a simple idea in 2019 after founders Andrew Maurer and Hugo Finkelstein identified a prevalent issue in the freelance marketplaces - the perceived exploitation of freelancers by companies like Fiverr and Upwork.
Originally envisaged as a marketplace linking businesses and contractors, the company soon identified a larger opportunity, one that aimed to simplify and revolutionize the way international contractors are onboarded and paid. By January 2021, Rise shifted focus to offer a payroll solution, aiming to provide businesses with a simple and compliant process to hire and pay international contractors.
Rise aims to straddle the line between Web 2.5 and cater to both crypto-native enthusiasts and traditional companies. The startup's payroll solutions seamlessly integrate both fiat- and crypto-based treasuries, along with corresponding internal accounting systems. By integrating web3 technologies into its platform, Rise empowers businesses to leverage the advantages of blockchain, automation, and cryptocurrency while ensuring compliance with traditional regulations. This unique blend positions Rise as the perfect bridge between the traditional and decentralized worlds.
In the latest Founder's Funnel, we connected with Rise cofounder and CEO Hugo Finkelstein to explore the company's inception, its unique functionalities, its commitment to security and data privacy, and its strategic roadmap for future expansion.
How did Rise begin? When did you know this was a great idea to pursue?
Rise started a couple of months after Andrew (CTO) and I met in 2019. We initially started as a marketplace connecting businesses and contractors for design and writing services. We thought the Fiverrs and Upworks of the world were (and we still think they are) taking advantage of freelancers.
We launched the marketplace in January 2021 and pivoted to our payroll solution a couple of months later after realizing the opportunity we had if we were to provide our payment and compliance infrastructure to customers in need of onboarding and paying international contractors.
How would you explain what you do to my grandma?
We help businesses onboard international workers compliantly all around the world without the need for a local entity and knowledge about working laws, taxes, etc. Workers can choose whatever currency they want to be paid in independently from the treasury companies.
For example, you have a US-based company and are looking to hire a Brazilian. You want to offer insurance, benefits, and pay them in their local currency but you don’t have an entity there or their currency. We do it all for you.
What’s the biggest hurdle you face in what you do?
These days, support is getting intense. We’re seeing a growing number of sign-ups and we don’t have a dedicated customer support representative. There’s a lot of education to be done for new users (managers and workers) since we’re integrating web3 technologies for web2 workers.
Can you tell us more about your experience in the blockchain industry?
I got my foot in the door in 2017 as I joined a cryptocurrency exchange called LGO (Acquired by Voyager) as marketing manager. I built a global community of 40,000 people and got fascinated by the power of communities. We did an incredible ICO (initial coin offering) and with its success, I launched a consulting agency for blockchain-related projects.
How does Rise address the specific challenges of compliance and payroll for businesses hiring globally?
We help businesses onboard workers anywhere in the world without requiring them to have an entity or physical presence in a particular country. We have these entities and hire workers for them. Global hiring is complex as each jurisdiction has different laws, requirements, and tax implications. We automate and do all the admin work for our customers so that they don’t have to.
Then, we provide a dual payment infrastructure that comprises both fiat currencies and cryptocurrencies. We automate the routing between the two. This means that companies can fund their payroll however they want (fiat or crypto) and their workers can choose what currency they want to be paid in independently from the currency used by their company.
How does Rise approach security and data privacy concerns when it comes to compliance and payroll?
Rise is in the process of obtaining SOC 2 and ISO 27001 compliance certifications. Our data is encrypted both at rest and when transferred using industry best practices to ensure our database remains in a safe environment. We recently completed a penetration test of our platform and received high marks for our data security policies as there were no significant vulnerabilities discovered.
Our compliance service providers support a wide array of industries including major banks, gaming and gambling enterprises, cryptocurrency companies, and others. KYC data is stored on their servers in compliance with GDPR protocols.
Can you walk us through the process of how a business would use Rise to manage its compliance and payroll needs?
The process is straightforward. A business manager creates a business account, fills out a couple of information fields, and then has access to the dashboard. There are 2 required tasks for managers who get to the dashboard for the first time:
Inviting their team members.
Choosing a subscription method, either a fixed fee per contractor per month or a percentage fee on the payment volume.
Managers can also invite other managers with different permission levels. Once the team members are onboarded, managers can create contracts and pay schedules with them. We have a good variety of schedules: Recurring, Milestone, Hourly, Instant, and Scheduled. They can also be all automated and batched into one payment.
The next step is for a manager to fund their payroll via fiat (bank transfer) or crypto.
That’s it!
How does Rise differentiate itself from other compliance and payroll solutions in the market?
Rise is the only provider which has a dual payment infrastructure. We are built both on and off-chain. Using the blockchain (Arbitrum) for our processes and account balances, leveraging a token standard to create a unique identifier for users, and much more!
Typically, the few web2 competitors who market their crypto offering leverage exchanges to handle crypto pay-ins and payouts. Meaning companies and their payees need an exchange account in order to be able to use them. These are full of friction and extra costs for the customers and workers. At Rise, having our own infrastructure helps by providing flexibility and speed at onboarding. I.e. DAOs with treasuries in crypto and no Coinbase pro accounts can get onboarded on Rise in a compliant way in just a couple of clicks.
Being built on-chain also enables us, down the line, to provide financial products to workers and companies which cannot be found in the traditional world.
On the web3 side of the spectrum, our competitors are solely focusing on DAOs and have no compliance or fiat rails.
Rise is the perfect bridge between Web2 and Web3 due to our dual infrastructure and compliant approach.
How does Rise work with traditional financial institutions and banks in its compliance and payroll solutions?
We have a network of banks and remittances partners all around the world which allows us to optimize international fiat payouts to the contractors getting paid on the platform. Rise is a Money Service Business with FinCen and currently going after Money Transmitter Licenses (State Level).
What are your future plans for Rise, and how do you see it evolving in the coming years?
We’re launching our Employer of Record service within the next couple of months in the US. It’ll be followed by the same service in other countries. Our goal is to help all sorts of organizations (business or DAO) whatever the stage they’re at. Whether they’re working with contractors or employees, we want to help them.
What are some of the most common mistakes that you see startups making?
Not moving fast enough. Not being as close as possible to their current customers or potential customers (in the early days). Not staying lean after raising.
What advice would you give any new entrepreneur entering this space?
In general, try to build your network as much as you can and surround yourself with people who will open doors for you. Be open to feedback and listen more than you speak.
Regarding the web3/crypto space, I’d say make sure you’re solving a real problem that people or businesses are willing to pay for. Be optimistic but rational and pragmatic.
Why was SGC a good investor to team up with in your view?
SGC co-led our Seed round and I couldn’t be happier to have them by our side. It was important for us to partner with global investors as our goal as a company is to build a global payroll system. SGC was perfect in that case: built by occidentals with deep networks in the APAC region. On top of that, they’re experts in their field and some of the smartest investors I know.
Can you educate our viewers on the current state of affairs in the Web3 ecosystem?
There’s a lot happening in the space. We’re past the craziness of the last bull runs and to me it is the perfect time to be building. People are real with each other, businesses with real use cases are being built, and there’s less frenzy.
Privacy is becoming a hot topic with new Ethereum scaling networks launching to solve it. I’m particularly excited about this topic as I know the development of these networks and technologies will accelerate the adoption by corporations. For example, payroll is a critical business operation that you don’t necessarily want public.
Regulation is also at the center of attention. We’re seeing firsthand which countries are being proactive about defining a clear regulatory framework and which ones are not. MiCA (Markets in Cryptoassets) was just passed in the EU which will drive more businesses to set up operations there. In the US it’s a bit more unclear for now from a regulatory standpoint.
Where are you expanding now and where do you plan to expand in the future? How can SGC help you get there?
We’re expanding to Europe now and plan to expand to the APAC region and Latin/South America next. SGC can help by introducing us to compliance, HR, and accounting experts globally to accelerate our international expansion.