Franklin — The crypto space continues its unstoppable innovation as other companies developed for the sake of the future have seen incredible progress.
While projects have been the focus of most firms, several firms have emerged to aid the growth of the crypto space.
Franklin is among the companies making great strides.
Franklin is a company that provides tax-compliant hybrid crypto and cash payroll services, namely to startups and businesses.
Like most startups, the company needed funds to secure its future.
So far, it has raised a $2.9 million seed funding round, courtesy of venture capital firms gumi Cryptos Capital (gCC) and CMT Digital.
It was also able to raise that amount thanks to investors like Arca, Portage, Sfermion, and Synergis Capital.
Franklin’s payroll software was developed to allow small to midsize businesses that want to have the option to pay their employees in cryptocurrency.
Additionally, the company announced on Monday that its software automatically syncs with Quickbooks now.
As of now, Franklin is live on the Ethereum Mainnet and Polygon blockchains.
Its initial clients include crypto wallet providers like Alto, Echooo, and Soul Wallet.
“We’re focused on providing a more flexible payroll experience, which is why we have a hybrid cash and crypto product,” said Megan Knab, founder of Franklin.
“We found that lots of Web3 native teams wanted to be using crypto, but the administrative burden of it — from tax form generation, the compliance side, accounting side — was too big of a burden for them.”
Franklin’s current customers primarily perform transactions through stablecoins, processing crypto payments for employee bonuses.
The firm also offer other features, including:
- Batched transactions
- Multicurrency selection
- Automated tax filings
Knab also says it can process US dollar transactions within two business days.
“There are a bunch of rules in the United States about how you can pay your team in crypto, so we bake all those rules into our platform,” she said.
“We look at it on a per-state basis – most states require that you pay your W2 employees in USD-equivalent currency; if you’re paying a contractor, the rules are generally much looser.”
“So we’ll look at where your company is incorporated, where are the W2 workers and what states they’re in, and we make sure that the payment you’re planning to execute follows the rules of that specific jurisdiction.”
Read also: SEC actions against Coinbase spur reaction from crypto community
Meg Knab is a crypto accountant.
She had previously worked as VP of finance at Serotonin, the Web3 marketing agency.
Knab would later launch Franklin in the spring of 2022.
Franklin is one of the companies (specifically the second company) to spin-out of Serotonin’s product studio.
Mojito, an NFT commerce platform, pioneered the spin-out, launching in 2021.
Serotonin claimed that Mojito generated more than $120 million in sales for well-regarded clients like:
- Lyrical Lemonade
- The Milwaukee Bucks
- Pace Gallery
“Many Serotonin services clients naturally became customers of Mojito or Franklin,” said Amanda Cassatt, Serotonin’s co-founder and CEO.
“Companies come to us for help with their Web3 strategies, then once it comes to executing that strategy, they need a software provider.”
“We refer businesses to Mojit whenever that is a fit, for example, with Sotheby’s and Pace Gallery,” she continued.
“When partners come to Serotonin asking about crypto finance and payroll, we refer Franklin because we are confident it’s a solid product built by a competent team.”
Pricing, seed round, and plans
While Meg Knab didn’t disclose Franklin’s pricing model, she hinted that it was similar to other existing Web2 payroll platforms, Gusto and Justworks.
Additionally, angel investors in the company’s seed round includes Jason Brooke, the VP of Sapphire Ventures, and Iladro Sauls, an associate at Sapphire Ventures.
Franklin has near-term plans to expand the company’s offerings with crypto-integrated retirement savings accounts and health benefits.
The company is also looking to add compatibility with other layer-2 blockchains.
In 2022, financial services entity Fidelity allowed companies to diversify their 401(k) retirement plans using Bitcoin Investments.
However, three US senators asked Fidelity to halt the Bitcoin 401(k) offer to customers following the FTX collapse.
“Being able to offer tax-advantaged crypto via a retirement program is something we’re working on a partnership with,” said Knab.