LEAGUE OF ITS OWN
Online platform puts employment benefits in the hands of employees,
Going to the dentist, chiropractor or massage therapist and then getting reimbursed through your employer’s work benefits program is usually a tedious process.
You have to fill out a form and mail in receipts for review and approval by some administrator somewhere.
A few days or weeks later, you finally get your money back — although sometimes it’s a paper cheque that you then have to deposit. If you’re really lucky, you might be able to do some of this online and speed it all up a tiny bit.
Like any warm-blooded, smartphone-owning individual, Toronto’s Michael Serbinis thinks this is ridiculous. At a time when connectivity allows for instantaneous transactions — when everything anyone could want is at our fingertips thanks to the likes of Amazon and Uber — it’s a system that’s woefully stuck in the past.
“It’s an arduous process for what is a highly predictable activity,” says Serbinis, a serial entrepreneur who most recently sold Kobo, the ebook retailer he founded in 2009, for $315 million (U.S.) to Japan’s Rakutan. “The more I dug into it, the more fascinated I was with how big the market was and how relatively undisrupted it was.”
To that end, Serbinis launched League last summer, a Torontobased startup that’s looking to turn the $4-trillion North American benefits industry on its ear by replacing the archaic process with mobility, instant digitalization and personalization.
The original idea was to provide an organizational tool for companies looking to manage their wellness programs. New businesses, especially in technology, are increasingly of- fering employees such perks, which can include daytime yoga sessions or meditation workshops, on top of their regular drug plans and dental benefits.
Many, however, are encountering administration problems as a result and are having to assign staff to manage scheduling and accounting.
League’s basic software platform eliminates that need — and cost — by allowing employees themselves to sign up for sessions using their phones, with billing to the company from service providers happening automatically.
It wasn’t until Serbinis began selling companies his tool, and hearing their feedback, that he realized the bigger potential market — the provision of benefits themselves.
Several customers told him of their dissatisfaction with existing providers, both in terms of the antiquated processes they were using and the services themselves.
They were finding that employees didn’t use a lot of the benefits they were paying for, which was especially true for companies with many younger workers. Millennials, after all, don’t usually need hearing aids, insoles or chiropractic sessions, but they are interested in more preventative wellness services, like yoga or meditation.
Serbinis decided to add an intermediary digital “wallet” option, which businesses could use to provide employees with a set amount of credit that could then be spent on the services of their choice. One employee could choose to spend their monthly credit entirely on yoga sessions while another might choose meditation, for example.
The platform and wallet options have paid off for League so far, which takes a cut of companies’ benefits spending in the single to low double digits. The company has landed funding from OMERS Ventures and BlackBerry founder Mike Lazaridis’s Infinite Potential Technologies, and in November expanded to Seattle.
About 100 businesses are using its services, and the company plans to expand to five more U.S. states this year. The end goal is now within sight, with a move into group benefits happening soon. League will be looking to do a Series A round of funding within the next month to fund the expansion, Serbinis says.
Michael Garrity, chief executive of Toronto-based consumer-lending firm Financeit, is looking forward to trying League’s group benefits when they become available. He’s a fan of the company’s existing platforms, which he adopted to better manage wellness programs for his 90 employees. “We were already committed to health and wellness as part of our corporate culture. It was wellintentioned, but ad hoc,” he says. “They added structure and rigour to it.”
Observers like League’s chances, mainly because benefits are increasingly becoming an important part of the compensation package used to land employees. Giant providers such as Manulife, Sun Life and Great West aren’t known for innovation and aren’t necessarily offering customers such flexibility and options.
“There’s a war on talent in certain industries right now and attracting younger employees is tough for a lot of companies,” says Martin Perry, managing director of Toronto-based Techno Ventures. “These extra benefits are certainly attractive to them.”
Others like the fact that it’s Serbinis himself behind the effort. Serbinis sold his first company, collaboration software maker docSpace, to U.S.based Critical Path in 2000 for $258 million in stock. He then helped build Kobo into one of the world’s biggest ebook sellers before selling it to Rakutan in 2011.