Bringing Innovation to Employee Benefits: Our Investments in Forma
The battle to attract and retain talent has never been tougher. In 2021, more than 47 million Americans voluntarily quit their jobs while companies across the U.S. struggled to fill millions of openings. High recruiting and employee replacement costs are putting increased pressure on companies to rethink their compensation programs, including the benefits they offer.
According to a MetLife employee benefits survey, 69% of employees said that having a wider array of benefits would increase their loyalty to their employer. Forma is on a mission to make benefits more flexible — and therefore more valuable to employees.
Today, we’re excited to announce that Emergence led Forma’s Series A and participated in the company’s Series B.
I first met Jason Fan and Max Hsieh at AngelPad’s demo day in early 2019. I was impressed with their understanding of how disjointed and difficult to navigate employee benefits were, both for employers and employees. Additionally, I was intrigued by their vision to use programmable payment rails to reinvent benefits offerings.
Over the following year and a half, I stayed close to Jason and Max and tracked Forma’s progress. I took note as they began to land impressive customers such as Zoom, Stripe, and Square. And I heard again and again from familiar Forma customers and users that their offering was game-changing. They couldn’t imagine a benefits program without Forma. It’s rare to hear feedback like this, and when I did, I realized it was time for our team to investigate further.
Increasing benefits complexity creates opportunity
In our research, we learned that U.S. employers spend over $50 billion on workplace wellness programs and $1.2 trillion on employees’ (and their families’) healthcare each year. And yet, we heard very consistently from companies of all sizes that while there’s been a lot of innovation in benefits over time, it’s become increasingly complex for them to manage the widening array of benefits that employees now demand.
Every year, benefits managers solicit feedback from employees on the benefits they want and change their benefits offering accordingly. Despite their best efforts, many employees still don’t feel they are getting the benefits that suit their needs. As a result, many benefits are underutilized and both companies and their employees are disappointed.
Enter Forma
Jason and Max’s insight was to turn the benefits selection process on its head. Instead of having employers select a range of benefits each year and hoping they’d make employees happy, they put choice in employees’ hands with an incredibly elegant solution. Forma’s platform allows companies to fund a benefits account for each employee that can be used on categories of benefits that their employer defines. This account is accessible using a debit card that can be used wherever an employee would like. Want to attend classes at your favorite neighborhood yoga studio? No problem. Have a babysitter that comes by to help you in the afternoons while you’re finishing up work? Covered. Need some additional office equipment to make your home office complete? Forma can help there, too. And if you’re not sure exactly which benefits might suit you, Forma offers a marketplace where you can easily browse and purchase items or services that meet your needs.
Making benefits flexible and easy makes everyone happy. And further, in an age when more employees are working remotely, it’s mission-critical. Employees’ benefit needs are even more wide-ranging when they’re located across many states and countries. Forma’s platform is available everywhere, which makes managing this new challenge a snap.
Our partnership with Jason and Max
After hearing outstanding reviews from customers and employees – and understanding exactly how big an opportunity was ahead of Forma – we were convinced that we wanted to partner with Jason and Max. We were thrilled to lead Forma’s $15 million Series A in the fall of 2020. And we were equally excited to play a meaningful role in their Series B, led by Ribbit Capital, in the fall of 2021. Notably, a number of amazing founders including Jack Altman of Lattice, Joe Gebbia of Airbnb, and Tobi Lütke of Shopify also participated in Forma’s Series B, along with previous Forma investors AngelPad, Stripe, and Upside Partnership.
The last 18 months since we began working with Jason and Max have been exciting. The company has grown dramatically in terms of customers, employees, and revenue. And at the same time, Forma’s product offering has expanded, its executive team has grown, and its vision for reinventing employee benefits has crystallized even further.
Congratulations, Jason and Max! We’re proud to be your partners and are excited to continue to work alongside you and the rest of the Forma team as you reshape the employee benefits market.
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