BetterWorks, a young Los Angeles-based employee rewards company, is announcing a $8 million Series A round of financing from Redpoint Ventures. BetterWorks' total funding, after an early round of financing from angel investors, now stands at $10 million. Paige Craig, CEO and co-founder of BetterWorks, says the company plans to use the financing to scale out to into the top 20 U.S. markets, and add social features to the platform by the end of August.
Craig says that the plan is to expand into the top 20 U.S. cities by employment, though the company is not yet naming the cities it plans to target. Currently BetterWorks is only available in Los Angeles, and the company says it plans to launch "soon" in San Francisco and New York.
The BetterWorks Perks platform provides a Web interface for employees to take advantage of perks and discounts being offered to employees by local businesses. At the end of the month the company plans to add a free edition of BetterWorks that anyone can sign up for — allowing users to invite friends to take advantage of deals offered on the site, even if the don't work for the company using BetterWorks. Think of it as a marriage between location-based deals sites like Groupon and traditional employee perks programs — but without as much hassle for businesses to manage. Craig says that the point is to offer incentive programs to small and medium-sized companies that need a cost-effective way to reward employees.
How cost-effective? Businesses with less than 10 employees pay only $30 per month, and the cost scales up from there to a flat $1,000 per month for "enterprise clients." Costs for services offered via BetterWorks, like food orders, gym access, and more, can be paid by the employer, split between employer and employees, or paid entirely by employees.
Combining employee perks and a Groupon-like system for connecting vendors with employers is a smart move. If BetterWorks can execute, you might be hearing a lot more about the company through 2011.