FFL Partners Invests $100 Million in Workforce-Services Firm Velocity Global

Using part of the new investment, Velocity recently acquired iWorkGlobal, and estimates the combined company will have $1 billion in pro-forma revenue in 2022
By Laura Cooper

April 5, 2021

Private-equity firm FFL Partners has invested $100 million in workforce-services company Velocity Global LLC in a bet that remote work is here to stay.

Denver, Colo.-based Velocity Global provides services that include compliance, payroll, consulting and immigration to businesses in 185 countries. Founded in 2014, Velocity Global has a strong footprint in what is referred to as the “employer of record” industry, which helps employees of different companies to legally work in geographies where those companies do not have formal offices.

For instance, Velocity Global registers and pays certain employees of its customers through its platform, while the customers themselves continue to manage the work those employees do.

Alongside the new backing from FFL, Velocity Global recently acquired San Francisco-based iWorkGlobal, which allows businesses to help with hiring, benefits, onboarding, compliance and agent-of-record services to pay staff, according to its website. Terms of the deal were not disclosed.

The combined company is expected to have pro-forma revenue of $1 billion in 2022, according to Velocity Global Chief Executive Ben Wright. The acquisition, he added, will strengthen the company’s presence in the U.S. employer of record market.

The investment reflects FFL’s ongoing interest in human resources, especially technology-enabled services, according to Cas Schneller, a managing partner at the firm. FFL has backed a number of businesses in the sector, including a 2019 investment in specialized staffing firm ALKU LLC, and a 2017 investment in ProService Hawaii, which provides payroll, administrative and risk management services to business customers.

Mr. Schneller and Mr. Wright knew each other from their days at the University of Notre Dame, but reconnected professionally about four years ago, Mr. Schneller said.

FFL’s investment marks the first time Velocity Global has received outside investor capital, according to Mr. Wright. Both the investment and the iWorkGlobal acquisition closed at the end of last month, Mr. Schneller said.

The investment was FFL’s first out of its newest fund, according to the managing partner. He declined to provide further details, though a filing with the Securities and Exchange Commission indicates the firm is in market with FFL Capital Partners V LP.

Although companies were increasingly embracing remote work before the Covid-19 pandemic hit, the past year has accelerated that shift, and Velocity Global is well-positioned to grow as a result, Mr. Schneller said. He has also seen this dynamic in FFL’s other portfolio companies, especially as they think about hiring talent; managers are more focused on hiring the right people, and less on where they will work, he explained.

Mr. Wright said the immigration service of his company has seen its workload skyrocket due to the pandemic, as office structures become less rigid and people have found the opportunity to work from different places.

“Now that people are starting to get vaccinated and borders are opening, people are saying, ‘I can work from anywhere’,” he said.

Source: WSJ Pro Private Equity, FFL Partners Invests $100 Million in Workforce-Services Firm Velocity Global (Paywall)