Pave, a San Francisco startup that helps companies plan, communicate, and benchmark compensation, has raised a $46million Series B round. It was led by YC Continuity and also included participation from Andreessen Horowitz, Bessemer Venture Partners, and Bessemer Venture Partners. This round comes eight months after Pave had closed a $16million Series A round. The current financing places Paves' valuation at $400million, an increase of $75 million from last year.Pave was founded with an ambitious goal. Can it accurately measure the pay of venture-backed tech companies and help startups get their comp tables off spreadsheets? Glassdoor and AngelList have tried to create a comparable benchmark-worthy data set. However, Pave may have an advantage over those who have tried the same thing before. Y Combinator is the world's largest startup accelerator. It helped Pave to incubate, and it is currently leading its latest round through its capital vehicle. One-third of Pave's 900 customers have come from Y Combinator to date. CEO Matthew Schulman sees this number increasing.Schulman stated that YC's support for Pave, the YC-stamped industry leader in [compensation tech] is and will be a game changer for our distribution and our ability to have extensive data coverage in our benchmarking software. Paves' distribution model was similar to that of Fintech company Brex, which is also backed by Y Combinator Continuity. According to the founder, 60% of YC businesses are active Brex customers.YC's dependence on them could lead to platform risk. This is due to the fact that the accelerator often invests in rivals within the same batch. Y Combinator Continuity may invest in Series B rounds or higher. However, this could be a sign that YC has found the right player to support. Ali Rowghani (managing director of the fund, and former COO at Twitter) has joined the Paves board.The startup's data is vital to its success. It supports each of Paves three main services. Pave uses market data and partner data to help companies set benchmark salaries for their employees. The startup integrates with HR tools like Workday, Carta, and Greenhouse to provide its customers with a complete picture of how employees are being compensated and what makes sense for salary bumps and promotion cycles. Third, data analysis results in formal offers and compensation packages for employers to offer to employees.Current customers of Paves have access to data about over 65,000 employee records. The first product is a top-of-funnel service that's free, and the second and third products are paid services that can be purchased like any other enterprise software contract.Compensation is fraught with inequity. This leads to the gender wage gap and the gaps in the market about minority pay disparity.Schulman sees one of Paves' goals as helping companies go beyond doing their D&I analysis once a year to do it regularly. The company will create diversity and inclusion-specific dashboards to allow companies to identify inequalities and get suggestions on how to fix them.Schulman stated that what gets measured, gets better. Pave began to track its own diversity and compensation metrics in an effort to make it more transparent with employees and to inspire other companies to do so. Paves employees identify as women at 33%, which is a significant increase from the industry average of 28.8%. Paves executives and Paves board members identify as women half of the time. The company committed to having 50% client-facing positions, including customer success managers, sales representatives, and other staff members, be women or from underrepresented groups.Although Pave has begun to publish its internal benchmarks, it is not yet standard for tech companies to be transparent about diversity. It is much easier to get valuations rather than details on the composition of individuals who were previously overlooked within an organization. Pave launched the Pave Data Lab recently, which uses its data to show trends in compensation and inequalities in how tech workers are compensated. Pave does not require companies that it works with to submit gender or race information into its benchmarking tool and did not disclose the percentage of companies that do.It hopes that noise will make a difference. All companies can now access the Paves compensation benchmarking data for free. This will provide more data and standards in an otherwise confusing field of compensation.
