Lystable Raises Additional $1.5 Million in Seed Funding

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London-based startup Lystable announced Tuesday it completed a seed funding round of $1.5 million with venture funds Toba Capital and Spring Capital. The round was led by earlier investor Valar Ventures. Together with the initial seed rounds in late 2014 and early 2015, total funding of Lystable is now at $3.5 million.

The investments in Lystable, which also became a finalist this week at the TechCrunch Disrupt London Startup Battlefield, are a continuation of the trend of investments into work intermediation platforms (WIPs).

Within the heterogeneous and evolving WIP space, Lystable is a unique entrant. Launched in November 2014, It is one of a small group of platforms focused on enabling enterprises to manage and engage their external contract labor. However, there is at least one unique twist that Lystable brings to the enterprise table.

We had a chance to talk about all of this today with Lystable CEO and Founder Peter Johnston.

What is Lystable?

In some ways, Lystable is like any other work intermediation platform start-up, finding its way into the world. However, Lystable is focused on providing enterprises with a platform to manage and directly source non-employee talent, which Johnston notes is increasing and will continue to do so. He points out that, even today, the extended workforce of many companies, such as Google, a Lystable customer, can comprise over 50% of a company’s’ total workforce.

The Lystable platform is an enterprise platform that integrates with other enterprise systems. It allows business users to directly select and engage their known contract workers and maintain information about their skills, engagements and performance. Johnston said that integrations with HR and financial systems are common. Today, he said, the platform handles the transmission of invoices to the client company, and the company then handles payment of the suppliers.

The mention of suppliers here brings us to how Lystable may differ from other platforms that sometimes have been grouped into a category termed freelancer management system (FMS). Johnston speaks of “supplier management” and “vendor management,” because he says the Lystable platform is not just about dealing with individual contingent workers — it is also expressly designed to allow enterprises to engage their suppliers of labor and talent-based services.

Lystable

In the past months, Lystable has made creative agencies and their talent a major focus, though the platform can handle other suppliers as well, such as law firms and consultancies. Client companies bring their supplier relationship, which are configured into Lystable. Client’s business users then have ability to directly source workers from the supplier via the platform, and the suppliers invoice the client through the platform.

This focus on suppliers, Johnston says, is what differentiates Lystable from so-called FMS solutions and in some ways makes it look more like a vendor management system (VMS) — a comparison that may not hold mustard at this point. Johnston also emphasizes that Lystable is not, at least at this time, a marketplace, but he sees the platform as one that could be leveraged in a range of directions.

In just a year, the company has managed to begin engaging and penetrating an impressive range of enterprise businesses, including Google, The Economist, IDEO and Expedia. According to Johnston, Lystable is working with about 30 businesses, including some smaller in size than those listed here. Johnston told us that that adoption would be gradually from working with a specific department and expanding to other departments.

Lystable’s pricing model today is forgiving of businesses that just want to get their feet wet. There is freemium offering as well as a paid premium offering:

Lystable

Clearly, to get true enterprise features, client companies have to go for the big whale. There was no comment on pricing for the premium offering, except that it appeared to be a licensing model.

A Cross Between FMS and VMS

Lystable is unique entrant into the work intermediation platform space that often carries different labels like online staffing, human cloud, crowdsourcing and FMS. Lystable appears very similar to what others call an FMS, but it appears to be differentiated with its focus on and accommodation of suppliers. To say that it is a VMS would be an exaggeration today, but it might be the starting platform for a light VMS for smaller companies. At the moment, Lystable looks like a cross between an FMS and an very, very light VMS.

Clearly, there seems to be notable investor confidence in the path the company is on. The frequency and escalation of such investments in the space suggest that work intermediation platforms are not a passing fad.
Contingent workforce and services procurement managers should view Lystable as further evidence that work intermediation platforms are crossing the moat surrounding the enterprise redoubt. They can’t be ignored and must be monitored and observed very carefully.

In fact, they are not a hoard of barbarians at the gate, looking to storm and pillage your business. They are platforms that can be used to your business’ advantage to both control costs and risks while supporting your business users’ desire for new more direct ways of engaging quality talent.

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