Grazzy, an app that powers same-day tip payouts for hospitality workers, has raised $4.5 million to keep growing.
The seed funding round was led by Next Coast Ventures and Tuesday Capital.
Grazzy allows consumers to digitally tip restaurant and hotel staff by scanning a QR code. Workers can then choose to instantly access those funds rather than wait for their employer to convert them to cash. Grazzy said this setup can improve employee retention.
“Even as hourly pay rates increase, we know that cash constraints have meant meaningfully less earnings for service industry workers who depend on tips,” said Grazzy founder and CEO Russell Lemmer in a statement. “Our digital, employee-centric platform helps those folks make more money, use it the same day, and save and spend in better ways.”
Grazzy charges a processing fee for the instant payment option. It said the charge is the lowest in the industry but did not reveal what it is.
Lemmer founded the company in Austin in 2021. He previously ran Dealerware, a software platform for car dealerships.
Grazzy is currently in use at a number of hotels and is also marketing to restaurants and salons.
“The platform has created a positive impact with our team, increasing the engagement and morale,” said EJ Varela, GM at Hotel Abri in San Francisco, in a statement. “It's not only increasing their financial earnings daily, but it has organically increased our guest service and cleanliness scores.”
Employees are increasingly demanding same-day payments. According to a 2021 survey by The Harris Poll, 83% of U.S. workers ages 18 to 44 feel that they should have access to their wages at the end of each workday.
Providing that perk could be a way for restaurants to sweeten their employment proposition as they continue to struggle with hiring and retention.
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