BetterUp CEO expects ‘continued growth’ post COVID-19

BetterUp Co-Founder and CEO Alexi Robichaux joins Yahoo Finance Live to discuss how the company has adapted amid COVID-19.

Video Transcript

ZACK GUZMAN: In this week's start-up spotlight, we are focusing in on the startup helping companies improve their employees' satisfaction and growth. In fact, it's been working so well that San Francisco-based BetterUp just raised another $125 million at a valuation now north of $1.7 billion. And for more on how it all works, I'm very happy to welcome in the co-founder and CEO of BetterUp, Alexi Robichaux joins us right now. And Alexi, congrats on the latest funding round. I guess we'll start just kind of with how BetterUp works, what it offers to the companies it works with, and I guess the results that those companies are now seeing.

ALEXI ROBICHAUX: Great. Well, thanks for having us. It's a pleasure to be here. The simplest way to think about BetterUp is, we're a mobile platform for personal growth and professional development. And we enable companies to equip employees with everything from leadership coaching to sleep and nutrition coaching, to our new product release as part of the round, coaching for mental health. And the way we do this is by combining one-on-one coaching together with evidence-based digital learning programs and human care at the touch of a finger in your pocket for all your employees globally.

AKIKO FUJITA: I imagine you've seen some significant growth during the pandemic as we see more and more companies really invest in some of their employees. I'm curious what kind of services, what kind of coaching you've seen the most growth in, and how much of all this is ultimately about retention, how much of it is about boosting morale at a time when so many of us are just getting weary working separately.

ALEXI ROBICHAUX: Right. Yeah, it's a fantastic question. So the three hotspots, I would say, are areas where we see corporate executives, as well as employees, wanting to invest energy and effort. And hence the growth in those coaching conversations, to your question, have been, one, around, what does leadership and management look like in an increasingly remote world, and that's impacted especially by work at home situations if I have young children, or depending on my spouse's or partner's work from home situation as well. So, how do I rethink work in this world that's now remote first?

The second has actually been an increase in conversations related to mental health, or mental fitness, as we often think about it. And that's often related to stress management, resilience, and anxiety. And what we're seeing now for the first time in the C-suite is there's a real awakening around mental health as not something that should just be thought of in a stigmatized way about removing illness.

But I should be thinking about mental health generatively as a performance accelerant. And if my people are healthy, if my people are mentally fit, then they will be more creative, they will be more engaged. We will be more performant and productive as a company. And that's great for business, but most importantly, it's great as human beings because I'm taking care of my people.

And then the third area where we've seen coaching conversations increase and we've seen companies increase in their investment has been related to diversity, equity, and inclusion in the workplace. How do I now do those first two things, a remote friendly world and a remote friendly world of work, take care of the mental health and mental fitness of my workforce, understanding that we're not all the same people?

We have different experiences. We come from different walks of life some backgrounds. And the pandemic, the racial justice events that were brought to light this year, have not impacted everyone the same way. And we want to be very inclusive and take care of everyone, no matter where they are in that journey.

ZACK GUZMAN: Well, your customers also come from different walks as well, a pretty wide set you guys count as customers-- Snap, Chevron, NASA among them. When you look at it, though, I guess, to Akiko's question, it seems like right now would be a pretty hot time to be investing in something like BetterUp because a lot of these companies are dealing with issues around mental health or everyone cooped up in the work from home environment. So how do you see retention or maybe the growth changing, since you guys said in the past year, you've more than doubled your annual recurring revenue. But how does that look like in maybe 2022 and beyond, if companies take their foot off the gas in that respect?

ALEXI ROBICHAUX: Great question. Yeah, so we've been fortunate. Leading up to the pandemic, we were, on average, doubling or tripling year over year. So we've continued to see that growth that, obviously, it's harder to do as the larger the company grows. Our view is, I think one thing you need to BetterUp is because companies are investing in a preventative way to invest in the long term performance potential and human potential of their people, we actually think that companies are just now awakening, and we're going to see stronger continued growth in the years to come.

And I think for a lot of the pure play mental health vendors, this is probably their high watermark in time right now. They're seeing the highest engagement. They're seeing the highest sales that they'll likely see in their company's history. But because we focus on everything, from leadership development to sleep and nutrition, to peak performance, to coaching related to inclusive leadership, we actually think the next 10 years in this post-pandemic world is we're reconstructing the workforce, we're reconstructing the world of work. We're seeing demand signals that, hey, that is actually the start of a very long growth trajectory for the company. And so, we're really excited. We view this as the start and not the end of our growth journey.

AKIKO FUJITA: Do you see yourself as an extension of HR in many ways?

ALEXI ROBICHAUX: We do. I mean, HR-- in most of our companies, HR is the primary buyer. We really view ourselves, though, as an extension of people. And I think one thing that's changing corporate America is there's a realization that our people is not HR's job to manage. If I'm a line of business leader, I am as a CEO, I should be wearing that hat all the time. And so, historically, we had sold predominantly into HR.

What we've seen in the past year and a half-- and the pandemic has accelerated this-- is more and more line of business leaders, CEOs, CIOs, CMOs, CROs, are buying BetterUp outside of HR for their own teams directly, which is really exciting and rewarding to see that not just the human capital or the human managed-- human resource person, but all the executives are realizing my people are my number one priority. And I need to be investing in them.

AKIKO FUJITA: Alexi, Zack just pointed to the diverse portfolio or diverse offering of clients you have. I can't imagine these are all the same types of coachings that you do. The same thing-- what applies to NASA doesn't necessarily apply to Hilton. Can you talk about how you personalize that? How do those companies, for example, how do their offerings differ?

ALEXI ROBICHAUX: Great, yeah. So one of the things that's very unique about BetterUp is that we've built the combination of the human expertise on the network, the technology, and the science, and we brought those three things together to create that personalization. And so there are more commonalities than it may seem. The reality is, leadership is leadership. There's some basic skills that apply in a lot of contexts.

But when we partner with a company, we're able to personalize or customize across four different factors that range from their industry, who are the populations, the different roles of the employees we're coaching, to understanding at an individual employee level what are their learning dispositions, what are their growth goals, what's their communication styles, and then to even understand from a corporate strategy and growth projection, what is the company trying to achieve by supporting its people.

So our machine learning and artificial intelligence is able to take all those data inputs and actually do everything from matching you with the right coach. You can think of an eHarmony algorithm on steroids, but not focused on romance, but focused on finding the right fit for a coach. We have 97% success rate, and we weren't always there. It took a lot of work to get there-- to, at the company level, saying, hey, yeah, you may be a retailer, and you may be multinational. And not only do you need coaches that specialize in customer service roles, you need coaches across 30 different languages across the globe who do that.

We're actually the only coaching vendor or the only platform that can provide that global scale. And so, it's really fun. We're a bunch of geeks here at BetterUp. It's a fun combination of behavioral science and data science and then technology that all comes together to make this ability to customize and configure for each customer.

ZACK GUZMAN: Very interesting stuff. The CEO and co-founder of BetterUp, Alexi Robichaux, I appreciate you coming on here to chat with us today.