Panther: the Stripe for global payroll

Hi everyone 👋

As remote work takes off, global payroll companies are coming after ADP, Paychex, Paylocity and TriNet and their $22B of combined yearly revenue. Two strategies are emerging: the all-in-one platform, typified by Deel and its $629M of funds raised, and point solutions like modern employer of record (EOR) Panther.

ADP and other human-driven payroll services hire EOR out to services firms like Globalization Partners (approaching $1B in ARR) that rely on partnerships to establish a global presence and spreadsheets to manage the process. Panther's approach is to vertically integrate, owning their own entities and automating the work of an EOR via software.

Some of the key points from our conversation with Panther’s co-founder and CEO Matt Redler about building a modern, software-based EOR for global payroll:

A verticalized employer of record solution enables more automation and reduces human error, versus an ADP which contracts out its EOR services to a professional services company

[Human driven, service-oriented payroll providers] end up being incredibly inefficient, expensive -- everything that could go wrong… We believe that properly automating and integrating payroll, instead of having humans do everything, leads to, long-term, the Stripe-class solution and winning this space. (link)

Whereas the unified payroll vision brings companies like Deel into competition with domestic providers like Gusto, Panther's point solution and API vision means it can integrate with a Gusto to enable them to compete on global payroll.

From a market cap perspective, I have no doubt that there will be a number of billion or even $10 billion companies here... [T]here's just a lot more room for platform and fintech. [One opportunity would be] offering our global employment infrastructure as an API to these U.S. payroll companies. (link)

The global payroll point solution vision emphasizes delivering financial services to end users to drive greater margins and ARPU.

[Being a big employer of record] allows us to control the direct deposits of global companies and have a foundation for building a platform of really exciting, high-margin, embedded fintech services... everything from employment verification, payroll advances, debit cards, benefits [to] everything from international recruitment, to data around what people are being paid all around the world for different roles, to even physical equipment rentals all around the world. (link)

Check out our full interview with Matt Redler for more on the compliance and engineering that goes into making global payroll work behind the scenes.

Thanks!

Jan

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