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ActionTrac

Employee engagement, performance, and recognition solutions

19%

Investors

34

Time to Invest

Security Offered

Convertible Note

Minimum Investment: $100

  • Since January 2018, users have increased 351%, from 1,114 to 5,021

  • Signed distribution agreement to integrate its software with ADP’s application marketplace, providing potential exposure to ADP’s client base of more than 740,000 businessesi

  • Chosen by CIO Review as one of the 20 Most Promising Productivity Solution Providers - 2018

  • Customers include Omni Hotels and NV5, an engineering firm

Terms

Investment Terms

Security Type: Crowd Note

Round Size: Min: $25,000 Max: $500,000

Valuation Cap: $4 million

Discount: 20% 

Conversion Provisions: In connection with equity financing of at least $1,000,000, the Company has the option to convert the Crowd Note into non-voting preferred units (Conversion Units) at a price based on the lower of (A) a 20% discount to the price per Preferred Unit paid by investors in the Qualified Equity Financing or (B) the price per unit paid on a $4 million valuation cap. Please refer to the Crowd Note for a complete description of the terms of the Crowd Note, including the conversion provisions.

Overview

Opportunity

According to a 2018 Gallup poll, 66% of employees consider themselves to be either “not engaged” (53%) or “actively disengaged” (13%) at work. Those who are “not engaged” typically do just the bare minimum amount of work required while those who are “actively disengaged” openly express dissatisfaction with their job.ii Consistently having low employee engagement can have adverse effects on a company. Teams with low engagement often experience lower productivity, are less profitable, and have higher employee turnover.iii 

Gallup has found a couple of common components for companies with high-engagement: an unwavering focus on providing a culture where employees can perform at their best and embracing a culture of engagement where employees can continuously develop.iv​​​​

“Engagement is highly related to positive business outcomes”

— Gallup

Founded in 2017, ActionTrac aims to provide workforce solutions for businesses to improve employee engagement, performance, productivity, and, ultimately, increase business results. ActionTrac offers three different business solutions: TeamVue, PeerSocial, and TeamVue Collaboration that monitor, track, and reward performance, and enable collaboration across teams. Through its integration with Automated Data Processing Inc. (ADP), a provider of HR software, ActionTrac is able to market its business solutions to more than 740,000 businessesv that are clients of ADP. Currently, ActionTrac has over 5,000 users and counts a large hotel chain and a leading engineering firm amongst its business clients.

Product

TeamVue

Automate employee performance, recognition, incentive, and award programs

TeamVue Collaboration

Unified search and engage architecture enables companies to increase the Pace of Business

PeerSocial

Socialize employee to make recognizing hard work fun and rewarding for everyone

TeamVue

ActionTrac TeamVue is a cloud-based internal employee management system designed to automate employee performance award systems and incentive programs. Through the TeamVue dashboard, employees can nominate their peers for various awards across numerous categories. TeamVue offers existing ADP customers the ability to transfer their employee information directly onto the dashboard. Non-ADP customers can upload their employee list directly onto the dashboard through a CSV file. An employee list is needed to control who has access to the dashboard.

Companies can setup as many employee recognition categories as they would like. Sample categories include: employee of the month, employee of the quarter, teamwork, and sales leader. To nominate a fellow peer, employees follow a nomination link where they are asked to pick an employee, award, and an explanation as to why the employee is being nominated. Companies can also setup a QR code on the TeamVue dashboard that enables employees to scan it with their phone, where they will then be redirected to a nomination page. The ability to nominate employees can be restricted to managers depending on a company’s preferences.

Once an employee has been nominated, their nomination can be seen by all employees with access to the dashboard. For more prestigious awards such as employee of the month and employee of the quarter, nominations will need to be approved by a manager. Companies can restrict which managers have access to accept or reject nominations. They can also create hybrid “approver lists” that customizes which managers can approve awards depending on the department a nominated employee is in, the award an employee is nominated for, or if the award has monetary value attached to it.

All awards, recognitions, and manager approvals of the awards and recognitions are tracked in the TeamVue system. This enables companies to make informed decisions based on employee performance.

Awards can also be linked to monetary values (e.g. gift cards) to further promote engagement and performance amongst employees. The manager who approves the award can send an e-gift card to the recognized employee allowing them to use it online or print it out. Gift cards purchasable through the TeamVue dashboard include Amazon, Nike, Fandango, Starbucks, and more. ActionTrac receives 10% of the total amount for all gift cards redeemed on its platform.

TeamVue also provides a Corporate Messaging system. Through the messaging system, companies can send out important alerts, notifications, and companywide messages to all employees on their mobile phones. This enables companies to communicate with employees that don’t have access to email. Messages are sent through the TeamVue platform and are delivered to each employee’s phone through the ActionTrac app.

The messaging system has been designed so communication goes one-way and is used only for important company alerts, updates, and reminders. Companies have the option to direct messages based on employee level or department. All messages sent through TeamVue are archived.

In addition to facilitating corporate messages, the ActionTrac app can also be used by employees to nominate peers, receive notifications when they are nominated, and view their personal nomination history. The app is downloadable for both iOS and Android.

In addition to facilitating corporate messages, the ActionTrac app can also be used by employees to nominate peers, receive notifications when they are nominated, and view their personal nomination history. The app is downloadable for both iOS and Android.

TeamVue is available in both English and Spanish with plans to add additional languages in the future.

PeerSocial

PeerSocial is a cloud-based dashboard that enables companies to create kudo reward systems. Through the dashboard, employees can publicly recognize colleagues for their performance. Companies can setup an unlimited amount of award categories on the dashboard. Common reward categories include: Support, Leadership, Teamwork, and Hard Work.

Nominations are publicly broadcasted on the PeerSocial platform. Along with the award category for the nomination, fellow colleagues will be able to see who nominated the employee, the date on which the nomination occurred, the department of the nominated employee, and the location of that employee. The PeerSocial dashboard also keeps a leaderboard to track how many nominations each employee has received. This enables companies to monitor who is contributing the most and creates a “gamification” element for employees to compete with each other to reach the top of the leaderboard.

PeerSocial also offers a gift card feature to companies for an extra monthly fee. Under this feature, employees can be rewarded for their recognitions with gift cards from Amazon, Nike, Starbucks, and more. Managers are responsible for approving gift card rewards. When gift cards are purchased using this system, ActionTrac receives 10% of the total gift card amount.

TeamVue Collaboration

TeamVue Collaboration is an enterprise platform where companies can bring all their content and group collaboration elements into one central location. Dashboards can be created on the platform for different subject categories and business departments. Within the various dashboards, employees can share and discuss ideas, documents, and events. Only authorized users have the ability to create dashboards on the platform. TeamVue Collaboration also enables companies to track how often their employees use the function and measure their engagement.

Each dashboard has restricted access to invited team members. Only authorized users have the ability to add additional users to a dashboard. Once a user is part of a dashboard, they are able to view, post, and participate in discussions. Documents posted on a dashboard are viewable by all of the other members. Users can’t edit other people’s posts; however, they are able to comment beneath it.  

In the comment section, users can discuss the content and make suggested edits to the document. A logging capability enables companies to track employee content activity to gain insight on the level of employee engagement (how often employees view, access, and upload documents).

Use of Proceeds and Product Roadmap

ActionTrac anticipates using a majority of the funds from this raise to build out a new sales team, research and development (R&D) to add new features to their product lines, and for general marketing to promote their product lines. Most of the remaining funds are expected to be used for general working capital and business-related travel expenses. The company has discretion to alter the use of proceeds mentioned based upon a change in sales opportunities or new lead generation possibilities.

Over the next year, ActionTrac anticipates developing and adding additional features to its existing business solutions. One of the new features the company is developing would enable managers to vote on employees for recognition through the TeamVue platform. Another module currently in development for the TeamVue platform is an Action Tracking capability. Action Tracking would enable companies to view all open action items and track the items from open to close. ActionTrac also plans to increase its marketing and sales efforts throughout the Americas region (North, South, and Central America).

Business Model

Companies can purchase ActionTrac business solutions through the company’s website or through ADP’s online Marketplace platform. Through the ADP Marketplace, existing ADP clients can view a range of other enterprise business solutions from third parties that are available for purchase. ADP takes 25% of the total revenue from ActionTrac products sold through its platform.

ActionTrac aims to provide affordable pricing options to encourage companies to purchase more than one of its business solutions. TeamVue costs $3.49/user per month and TeamVue Collaboration costs $1.99/user per month.


Pricing for PeerSocial depends on the size of the customer. Companies with 50 employees or less can either pay $300 for six months or $600 for 12 months, payable up front. Companies with over 50 employees will be charged $1.99 per user per month. Additionally, companies have the option to purchase a gift card add-on option to their PeerSocial plans. For companies with 50 employees or less, this feature costs an additional $29 for six months or $58 for 12 months, payable up front. For companies with greater than 50 employees, pricing will vary depending on size. ActionTrac also receives 10% of all gift card sales through its PeerSocial platform.

User Traction

ActionTrac entered into an agreement with ADP in 2017 to offer its workplace solutions through the ADP Marketplace online platform—giving ActionTrac exposure to ADP’s more than 740,000 clients.vi

The company currently has two large clients, Omni Hotels and NV5, as well as several smaller clients. The majority of ActionTrac’s clients are currently on free or discounted plans. ActionTrac hopes to convert these enterprise clients into fully paying clients once the companies fully integrate the software into their businesses. ActionTrac has more than 5,021 registered users as of November 2018, up from 1,114 users in January 2018 (351% increase).

Historical Financials

Since inception, ActionTrac has generated $454 in total revenue. Almost all of the revenue generated during the period came from one customer. The majority of ActionTrac’s clients are currently on free or discounted pricing plans.

Year-to-date through November 2018, ActionTrac has incurred $102,212.19 in total expenses, a 124% increase compared to total expenses for all of 2017. The largest expenses in 2018 have been contracting fees (77.8%) and travel related expenses (11.9%). Contracting fees included both part-time contractor expenses and payroll expense for the founder. Payroll expense for the founder represented 73.2% of total contracting fees. In 2017, the Company incurred $45,563 in total expenses. Contracting fees (86.3%) and travel expenses (6.2%) were once again the largest expenses. Payroll expense represented 45.8% of the contracting fees. Contracting fees have represented the greatest proportion of total expenses in 2017 and 2018 due to ActionTrac hiring all employees to date on a contract basis instead of full-time.

Year-to-date through November 2018, ActionTrac has incurred a net loss of $101,769, compared to a net loss of $45,563 in 2017.  

Industry

Industry and Market Analysis

According to a recent Gallup poll, around 53% of workers in the U.S. are not engaged in their work – meaning they do the minimum amount of work required and quickly leave their company for a slightly better offer. This can have a profound impact on organizations. Organizations with high levels of employee engagement have higher customer engagement, retain more employees, experience fewer workplace accidents, and improve productivity. Gallup has also found that firms with high levels of employee engagement experience higher earnings per share (EPS) growth and higher profitability (up to 21%).vii

The market for employee engagement and recognition solutions is changing rapidly. Driving the change is a move from service and merchandise business models to models driven by software and technology – creating an opportunity for newer entrants to gain market share. According to marketing firm Starr Conspiracy, in 2016, the U.S. market for employee engagement solutions was valued at around $74.3 billion. By far, the largest category of companies that use employee engagement solutions is firms with over 2,500 employees – representing 62.4% of the market.viii 

There are several segments within the employee engagement market including: measurement, recognition, and wellness. Measurement solutions aim to facilitate frequent measurements of employee engagement. Recognition solutions aim to reinforce good behavior and hard work through formal employee recognition and peer-nominated recognitions. Wellness solutions aim to help employees with their physical, mental, and financial health.ix Starr predicts strong growth across all segments, particularly for smaller businesses within the industry. However, the research firm believes that companies offering measurement solutions have the highest growth potential as their next-generation measurement solutions seek to offer cross-segment features such as employee recognition, 360 feedback, goal management, and career pathing tools.x 

Competitors

Achievers

Founded in 2002, Achievers is an employee engagement and recognition platform. Its Employee Success Platform is a cloud-based software-as-a-service platform that offers employee recognition and rewards solutions. Through the dashboard, companies can setup health and wellness programs, recruiting referral services, recognition programs, sales incentives, and service milestones. The platform has been designed to integrate into human resource information systems (HRIS)’s to access files and employee information. The company also offers professional services to help clients integrate their employee engagement and recognition solutions into their businesses. Achievers also provides professional services to help clients integrate the solutions, and an interactive virtual assistant that periodically check-ins in on employees and can answer HR related questions. Achievers was acquired by Blackhawk Network, a payments network, in 2015.xi

Globoforce

Founded in 1999, Globoforce is a provider of enterprise employee performance solutions. Globoforce offers five different business solutions through its cloud-based platform: Social Recognition, Conversations, Service Milestones, Life Events, and Community Celebrations. The different business solutions enable enterprise employees to recognize each other for their performance, facilitate conversations between employees and managers, commemorate special events and days, and create group celebrations. In 2016, Globoforce reported a pre-tax profit of $3.9 million on $310 million in revenue, up from a pre-tax profit of $2.85 million on $283 million in revenue in 2015.xii

O.C. Tanner

Founded in 1927, O.C. Tanner is a culture-building platform that develops employee recognition strategies and reward programs. Solutions offered by the company include: employee recognition, service awards, company event planning, employee wellbeing, and one-on-one meeting planning. Through its one-on-one meeting solution, companies gain access to a dashboard service where managers can plan out meetings with their employees, set meeting goals, and track meeting progress. All of the company’s solutions are offered through a cloud-based platform known as Culture Cloud. In addition to business solutions, O.C. Tanner also offers clients the ability to monitor and track analytics on Culture Cloud in real-time. The company claims to have around 13.5 million users across more than 150 countries and 1,100 multinational clients.xiii

WorkStride

Founded in 1999, WorkStride (formerly, CorporateRewards) is a provider of enterprise employee recognition services. WorkStride offers several different solutions through its software platform. Solutions include: peer-to-peer employee recognition, service awards, employee training that can integrate into pre-existing internal training programs, “gamified” internal employee competitions, health and wellness programs, employee cash rewards and gift cards, and insight and analytics on employee engagement. Its gamification solution allows companies to setup competitions amongst employees where winning employees can gain monetary rewards. WorkStride offers an integration with ADP that allows companies to reward their employees directly through their payroll system. WorkStride was acquired by private equity group, Riverside Company, in 2012 for an undisclosed amount.xiv

Team

Hal Wendel

Founder and CEO

Hal founded ActionTrac in 2017 and has served as CEO since. In addition to leading ActionTrac, he also currently serves as Vice President at Brand Embassy, an omnichannel cloud-based customer service channel. Prior to ActionTrac and Brand Embassy, Hal worked for numerous companies in executive roles such as Chief Revenue Officer of NobelBiz, Vice President of Sales and Marketing at Voice Print International, and Vice President of Sales and Marketing at ThinkPassenger Inc. He also has prior experience in a startup environment, working as Vice President of Consulting Sales at Oblix, a startup which was later acquired by Oracle.xv Hal holds a bachelor’s degree in Economics from the University of Washington and an MBA from the London Business School.

Alan Schnepf

Director of Client Relations

Alan joined ActionTrac in January 2018 as the Client Services Manager. Prior to joining ActionTrac, he worked for nine years as an independent consultant helping clients with communications, client relations, digital marketing, software, and project management. In addition to his experience as an independent consultant, Alan also worked for more than 10 years as a writer for several newspapers. He has a bachelor’s degree in Journalism from Southern Illinois University, Carbondale.

Bhaskar Basu

Director of Engineering

Bhaskar joined ActionTrac in 2017 as the Director of Engineering. Prior to joining ActionTrac, he worked for more than 10 years in programming and software development. He has experience with programming languages including: Visual Basic, LAMP environment, javascript, and PHP. Bhaskar also has experience working with databases such as MySQL and MariaDB. He has worked for several startups and large companies such as Coca Cola and GE. Bhaskar has a bachelor’s degree in chemistry from the University of North Bengal.

Discussion

Endnotes

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