Berlin-based Kadmos, an end-to-end salary payments platform for cross-border employers, announced on Monday that it has raised €29M in a Series A round of funding.
The round was led by Blossom Capital, with participation from existing investors, including Addition and Atlantic Labs. The announcement comes three months after raising €8.3M in a Seed round in March, 2022.
The German company will use the funds to significantly increase its 30-person team and further invest in product and technology development.
With a focus on blue-collar migrant workers and an initial foothold in the shipping industry, the startup plans to move into verticals with similar salary payment structures – such as the construction industry, healthcare, and hospitality.
By closing the Series A fund, Kadmos has put itself in a position to capture a sizable share of the global cross-border B2C payment volume, which is projected to reach $1.6T by 2022.
How was Kadmos born?
Kadmos was founded in 2021 by MIT graduates Justus Schmueser and Sasha Makarovych, with a mission to make the salary journey of millions of migrant workers more transparent, convenient, and less expensive.
The founders came up with Kadmos after a relative of Makarovych’s, who worked as a seafarer, told him of the complexity and hardship involved in getting paid.
Typically, the traditional financial system presents employers with unnecessary complexity when paying salaries across the globe and often requires employers to pay hefty fees to transfer salary payments.
“For example, the shipping industry is dominated by expensive, slow, and untransparent payment processes. Many shipping companies resort to bringing significant amounts of cash on board to pay their employees, which is both costly and insecure,” says the company.
Kadmos aims to tackle the restrictions placed on the financial freedom of cross-border employees and use modern financial technology to allow migrant workers to have a streamlined salary experience.
Justus Schmueser, Kadmos co-founder, says, “The financial restrictions placed on migrant workers are truly shocking. Employees have to wait days or weeks for their hard-earned salaries to reach their families and are forced into paying exorbitant transaction fees or have to carry large sums of cash at their own risk.”
He adds, “At Kadmos, we are working to change the status quo through cutting-edge financial technology and ensuring the hard-working people who power the global economy can keep more of their well-deserved salaries. The speed and size of our latest funding round underline the potential for our platform and we’re honoured to partner with such a reputable and prestigious venture fund in Blossom.”
Streamlining cross-border payment
Kadmos provides companies with a simple, low-cost, and secure method for international salary transfers, while every migrant worker receives a digital wallet as well as a connected debit card to remit or directly spend money.
The funds can be kept in secure currencies within the Kadmos app, ensuring low transaction fees and market-leading foreign exchange rates. This ensures workers keep more of their salary when they send money home, says the company.
The company also provides integration with the Kadmos web application, where companies can automatically add their employees through an API connection to various crewing software.
Sasha Makarovych, Kadmos co-founder, says, “At Kadmos, our mission is simple, to make being paid internationally as easy as being paid domestically. In an ever-globalised world, it’s criminal that it is so difficult for cross-border employers and their employees to pay and be paid. We’ve been taken aback by the level of demand for our product, particularly as geopolitical crises continue to cause issues around cross-border payments. To have Blossom’s support will mean that we can continue to rapidly expand our team and the product.”
Based out of London, Blossom Capital is a Series A venture capital firm that invests in European founders building global businesses. So far, the company’s investments include Checkout.com, Moonpay, Pigment, and Tines.
Alex Lim, managing partner of Blossom Capital, says, “From the moment we met Justus and Sasha we couldn’t help but be drawn to their scale of ambition and drive. With outdated banking practices and multiple intermediaries that charge excessive fees, it’s clear that the process for cross-border payments is broken and Kadmos’ fintech platform is exactly the technology to fix it. 2022 looks set to be an exciting year for the team as they look to grow the product into new verticals, and we’re delighted to be joining them on this journey.”