May 8, 2023

Flight Plan #20 - Our Investment in Mercu

Mercu is powering the deskless workforce through WhatsApp based education and communication.

Written by

Seamus Crawford

When we first met Mercu Founders, Jascha in Sydney and later his co-founder Elliott in Singapore, we immediately recognised their exceptional talent for building and shipping world-class products. However, as we continued to engage with them, we also discovered their deep and nuanced understanding of their customer’s core problem set.

In addition to their extensive experience building product at Atlassian and SEA decacorn, Grab, we felt that co-founders Jascha and Elliott were uniquely positioned to build Mercu, a company whose mission is to revolutionise how the billions of under-loved deskless workers (~80% of the global workforce) communicate and engage with their employers.

Problem and market opportunity

Deskless workers are defined as the ~2.7B employees, contractors, and gig workers globally, whose day-to-day activities take place outside of a traditional office environment. This could include workers across industries such as retail, F&B, logistics, services, transport, healthcare, agriculture, education, and manufacturing.

In spite of the critical contribution that this workforce makes globally, they have been left behind in terms of technological innovation, with the majority of tools focused primarily on desk-based workers. For instance, in a study conducted by Emergence Capital, it was found that for a workforce that is rarely based at a desk, 83% of surveyed deskless workers were provided with impractical laptops or desktop PCs as their primary point of contact. Moreover, although approximately 60% of those surveyed were given a smartphone or tablet as part of their employment, very few of the tools or applications they were using were built or optimised for mobile-first communication. The survey also revealed that 60% of deskless workers were dissatisfied with the technology provided by their employers, citing slow, inefficient, and hard-to-use software as the top reasons for their dissatisfaction.

Globally, disengaged workforces cost employers upwards of $7.8 trillion in lost productivity. However, it has been shown that an actively engaged workforce can materially improve profitability for businesses by upwards of ~23%. This can be achieved through improvement in areas such as reduced absenteeism and employee turnover, fewer safety incidents, improved customer engagement, and increased productivity. We have seen large companies built in this space, such as Culture Amp and Workday, addressing primarily desk-based workers. Yet, there remains a huge gap in solving these problems for the much larger and underserved deskless workforce.

Vision & Solution:

As with solutions focused mainly on desk-based worker engagement, such as Qualtrics (used by over 75% of the Fortune 100), the key unlock for businesses isn’t software that provides a ‘whack-a-mole’ approach to solving specific deskless worker complaints. It is software and a solution that enables employers to glean timely insights and employee feedback; this empowers businesses to implement long-term solutions to solve the multitude of problems impacting their deskless workforces. This is what results in sustainable change and improvements, and delivers demonstrable ROI for customers.

Mercu is building the first communication Operating System (OS) for the deskless workforce, via a mobile-first chat-based engagement platform that enables businesses to engage, grow, and retain their deskless staff.

There are a number of tools on the market aimed at improving communication and engagement for employers with a distributed and fragmented workforce. However, the majority of these offerings have struggled to gain adoption at scale, primarily due to the friction of onboarding new tools, clunky corporate logins, lack of mobile optimisation, and little consideration for shift work dynamics.

Mercu solves this fundamental problem of adoption by focusing on distribution via already widely used communication tools such as WhatsApp, Messenger, and iMessage. The reason for building within these channels is clear - WhatsApp already has ~2.24B monthly active users (~25-30% of the global population) and is the most popular messaging app across regions such as Africa, Asia, Europe, the US, and LATAM.

With Mercu, there are no new apps for employees to download, no new logins, and no friction, thereby materially improving adoption and the quality of interactions from the get-go.

Early users of Mercu have already reported significant improvements in employee satisfaction and reduced churn. They are experiencing over 80% completion of staff communications and engagement programs and receiving 10x more insights about their deskless workers. For example, the MD of Guzman Y Gomez’s Singapore operations said that "Mercu has had the biggest impact of any tech in the last 10 years on our speed of new staff onboarding and improving engagement and retention.

Why we invested:

Top Class Founding Team with strong Founder-Market-Fit

  • As ever, at this early stage, Founder-Market-Fit is critical. Co-founders Jascha and Elliott are world-class operators and their unique insights and experiences, particularly in developing products at scale for this exact type of workforce, put them in a strong position to build a market-leading solution.
  • The TEN13 team developed a strong relationship with the Mercu founders over the past 6 months and watched the team build and ship products, alongside executing on early go-to-market with exceptional skill, hustle, and maturity.

Early traction and strong pipeline:

  • Mercu only went live earlier this year. However, from one initial customer, they have since built an impressive international pipeline, with the majority of sales and new opportunities having been generated organically via customer referrals.

Bullish on leveraging WhatsApp/chat apps as a platform:

  • The TEN13 team has seen the prevalence of WhatsApp, both as a social and business communication tool, across the majority of markets we review (both developed and emerging markets).
  • With over 2B monthly active users globally, we are excited by the thesis that platforms like WhatsApp offer the path of least resistance, not just for employee engagement, but also for commerce, transactions, schedules, timetables, and a whole host of other use cases. The prevalence of adoption of instant message tools like WhatsApp provides a major platform opportunity for businesses and products to be built utilising widely adopted everyday channels.

We are thrilled to join and support the Mercu team at this early stage, alongside our friends at Sequoia Capital (India) (following on in this funding round, having led Mercu’s Pre-Seed), 500 Global, Flying Fox Ventures, Archangel Ventures, and a number of other strategic angels.

Safe Travels!

Seamus and the TEN13 Team

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