Grazzy wants to stop letting people use “no cash” as an excuse to avoid tipping. • TechCrunch

Carrying cash used to be a thing, but now with modern credit cards and digital wallets, it’s hard to have more than a few dollars in your physical wallet.

Unfortunately, this also leaves many of us unwilling to show gratitude, especially when traveling, to give a cash tip to people who clean our rooms or bring your car.

Based in Austin Grazie He wants to change that with his pay-as-you-go tax compliance platform where people can leave tips for frontline workers and which employees can access the same day. It also provides a recruitment and retention tool for employers who rely on the service, such as hotels, bars, restaurants, and salons, while providing financial wellness tools for employees.

He’s one of those travelers who’s great at hotels but uses his phone for everything and rarely carries cash, Russell Lemmer, founder and CEO of Grazzy, told TechCrunch.

“During my stay in Las Vegas, I left my bags with the valet, and I wanted to tip, but I couldn’t,” Lemmer recalled. “I heard the servant say to his colleagues that this is seven in a row.” I was ashamed and started thinking of a solution.”

Russell Limmer Grazzy digital tipping

Russell Lemmer, Founder and CEO, Grazzy Image credits: Grazie

In a survey of others, Lemmer found he wasn’t alone: ​​The majority of the people he spoke to were also heavy phone wallet users who had previously been in the position of being unable to tip because they didn’t have cash.

He started working on Grazzy in September 2021, and what’s resulted is an app that takes a “business approach to Venmo,” a seamless way to show gratitude to someone they don’t know personally, he says.

Lemmer also wanted to help employers reduce the hourly worker turnover rate, which he said was a $100 billion problem In the United States, by providing a way for employees to earn more and save. He’s not alone: ​​As the global pandemic exacerbates already difficult conditions for frontline workers, other startups have brought in technology to solve certain aspects. For example, Antilles To connect those who never sit at desks, SnapShift To deal with human resources and ask nicely for customer experience.

Here’s how Grazzy works: Guests can tip employees instantly with a brand-specific QR code, and Grazzy Direct allows employees to instantly access their tips. Grazzy makes money from processing fees.

The platform also monitors and tracks funds so that companies can be tax compliant while also seeing wage increases and the impact on their employees.

Lemmer says Grazzy reduces the wait that often occurs with tips received through credit card transactions and the need to regularly cash or cut weekly paychecks. Additionally, by offering an alternative to traditional cash, Lemmer finds that digital tips increase employee earnings by 20%, on average.

Grazzy started working with its first large hotel client last July, and that has now grown to about a dozen people. Lemmer said the company is still in its early stage and started generating revenue last month.

Today, the company announced $4.25 million in seed funding led by Next Coast Ventures and Tuesday Capital. This brings its total funding to date to $6.8 million.

Lemmer intends to deploy the new capital in accelerating customer growth across additional hotel brands, operating groups, and restaurant and salon groups and in developing technology so that Grazzy integrates with major operating systems.

In the meantime, he has a three-year plan in the works that includes pursuing hotel operating groups that manage hundreds of properties and building additional financial wellness features for workers.

“We want to start layering on better ways to save and spend,” Lemmer said. “We feel like this is the next step after helping them make more money and access more of it in the same day. In the long run, they stay in those jobs a little bit longer, and it’s a recruiting tool for employers.”

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