What a way to end 2017! During the 76th International Selection Panel held in Miami, Florida last week, Peter Cauton (STORM Technologies) was unanimously selected by a global panel of leading businesspeople into the Endeavor network. See our official press release here.
In the fight for talent, Philippine employers face a daunting problem: while they spend ~$25B annually on benefits, aimed at attracting the best and brightest, these investments have minimal impact on hiring or retention. At fault are outdated benefits packages, designed for the Filipino family man of the 1980s rather than an increasingly diverse workforce. Storm is a Manila-based HR tech firm that redesigns the benefits experience for employers and employees by converting benefits (e.g. vacation, sick days, insurance, etc) into points that then be redeemed on its online marketplace, Storm Flex. Storm Flex features up to 15,000 digital and physical goods, ranging from cell phones to flights and additional health insurance plans for dependents, giving employees the power to choose their own benefits. A pioneer in the space, Storm counts many of the Philippines’ largest companies among its client base, including Nestlé, Coca-Cola, L’Oreal, and JP Morgan.
Founder & CEO Peter Cauton (42) made the great leap into entrepreneurship following a decade-long career in corporate human resources (HR). After graduating from the Ateneo de Manila University with a degree in management, Peter found himself with the responsibility of having to provide for his entire family after both his parents lost their jobs. Searching for a stable corporate career that would allow for as much people-interaction as possible, he found the perfect fit in HR. However, as he continued to climb the corporate ladder, he recognized glaring problems in benefits administration in the Philippines: benefits varied little across companies, and were in fact so peripheral for a growing number of employees that they did not factor into the job search. While serving as a project manager for a consulting firm, Peter pitched a flexible benefits system to his consulting company as a possible new business line, only to be rejected because it did not have an already proven place in the market.
Peter was undeterred. In 2008 he took a leap of faith and left his stable corporate job—in the middle of a recession as a new father, no less—and teamed up with a technical co-founder to start Storm from his living room. In its first iteration, Storm was a flexible reimbursement system. Through Storm’s SaaS platform, employees could (1) exchange their unused benefits into credit (2) spend on benefits of their choice (in spending categories pre-approved by their employer) using money from their own pocket (3) then submit the receipts for reimbusement through the system. Storm grew steadily to profitablity as a bootstrapped company. However, Peter felt the reimbursement-software-as-a-service model, common among Storm’s competitors, was limited in its scalability because it relied on the financial liquidity of employees and created many process problems (forging of receipts, human error in reimbursements, etc). He dreamed up a riskier innovation: creating an internal benefits marketplace where employees could convert their current benefits and use the resulting wallet on a marketplace owned by Storm. Peter raised $100K in seed money to execute the pivot, allowing the company to quadruple revenue for two straight years. In 2015, realizing that he had tapped into a large opportunity, Peter went on to raise a $4.3M Series A from Endeavor company Xurpas to ramp up operations.
Today, Storm provides flexible benefits to 100,000 employees across the Philippines’ largest firms. The company’s patent-pending marketplace, known as Storm Flex, is the only online marketplace globally that allows employees to convert their benefits into points. In response to client demand, Storm also recently launched Storm Kudos, a platform designed to drive employee performance. Kudos allows employees to recognize or congratulate one another with points that can then be redeemed in the Storm marketplace. Beyond its deep HR know-how, Storm also leverages its proprietary technology to emerge as a strong B2BC marketplace in the Philippines, a country where e- commerce has largely been hampered by payments and the fact that only 5% of Filipinos have a credit card. Storm’s unique business model allows it to bypass complex payments, as the client company’s wallet (i.e. the company’s budget for benefits) is used to make purchases. With a captive audience whose spending is tied to the marketplace, Storm is poised for exponential growth.
We are excited to continue helping Peter scale STORM Technologies and take it to the next level through Endeavor’s services. Congratulations, Peter!