Brazilian fintech Tako launches with a significant seed round led by Andreessen Horowitz and Ribbit Capital, positioning itself for growth in the financial tech sector
Payroll management is challenging in any nation, but it may be particularly so in Brazil because of the country’s constantly shifting legal framework and powerful unions, which make it much more difficult to do it correctly.
Fernando Gadotti, the CEO and co-founder of DogHero, LatAm’s equivalent of Rover, found this difficult. Gadotti decided this was his next area of interest when he departed the company in 2022, having sold it in 2020.
As Gadotti told TechCrunch, “every time the payroll arrives, it’s just a struggle, like it’s terrible, many hours, just like double-checking data back and forth, and we couldn’t really get any insight that we needed.”
“[We were] essentially operating in the dark, and as we continued to expand, it dawned on me that these issues weren’t merely bothersome; they were actually impeding the company’s growth.” Busy work is squandering a lot of our time.
Gadotti began working on Tako, a platform based in São Paulo that automates payroll and onboarding processes to save businesses time and centralize all employee data, just a few months after leaving DogHero.
In an effort to promote openness, Tako also gives staff members access to an interactive paystub and a dashboard where they can view information.
Even though there are American legacy payroll firms that operate in Brazil, such as ADP, Gadotti stated that because Brazil’s payment system is so distinct, it makes sense to have a local solution. Payroll laws are subject to regular changes, he noted.
Additionally, 10,000 unions—businesses frequently use multiple unions, he said—update their regulations a few times a year and may hold more sway than the laws itself.
Tako keeps up with these ongoing changes by using a large language model, or LLM. In order for Tako’s engineers to maintain the code base current, the LLM absorbs and processes the data related to labor and union laws.
According to him, it saves a lot of time to have the LLM have a head start, but they still want to retain people involved to guarantee correctness.
In 2023, Tako introduced its product. Gadotti stated that the business has been working covertly and handled payroll totaling tens of millions of dollars, but he would not provide additional information on its clientele.
According to Gadotti, the company is presently focusing on mid-market white-collar businesses in the financial and professional services sectors that employ 100–500 people.
Gadotti stated, “The approach we adopted is that we are not attempting to boil the ocean.” Before moving on to more complicated or industrial regions, we would like to start in a market segment that we are familiar with.
We are beginning with smaller sectors and will eventually move to more complicated ones as the business develops.
With a substantial $13.2 million seed round led by Andreessen Horowitz and Ribbit Capital, Tako is coming out of stealth. The Ramp founders and ONEVC were also involved in the round.
According to Gadotti, the company intends to double or triple the number of employees on its research and development team and allocate the majority of its cash to this area.
Future growth prospects for Tako include a wide range of prospective areas, including as the expansive field of employee benefits. According to Gadotti, the business intends to develop by adding new features like fast payments.
There are also other HR software startups in the nation, such as Gupy and Caju, who are more focused on other facets of HR and employee management, in addition to competing with established firms like ADP.
However, these businesses might potentially emerge as formidable rivals if Tako grows into these markets, which it probably will.
According to Gadotti, the word Tako means “octopus” in Japanese, which is how he views the company.
Tako’s platform is meant to be the brain of employee data with its tentacles reaching out into different areas of employee management.
Gadotti stated, “We want to focus on the whole employee life cycle.” “We are constantly listening to our customers’ pain points and where they want us to help them on.”