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What started out over three years ago as a very low-tech operation (essentially a directory about Chicago supplemented with a couple informational CD-ROMs) is today a high-growth HR tech company: UrbanBound.
UrbanBound, which provides a web-based platform for employee relocation, has doubled its employee base in the past year to over 30 employees and will likely do so again this year, co-founder and CEO Michael Krasman said.
But just three years ago, Krasman and his co-founder Jeff Ellman were just breaking away from fellow local HR tech company Hireology (where Krasman and Ellman remain on the board) to begin disrupting the corporate relocation industry.
The impetus for this was the realization that companies either a) hired expensive relocation management companies (for their top execs only) or b) gave employees a relocation stipend when relocating talent. The second solution is simply just “throwing money at the problem, but not solving the problem,” Krasman said. “Employees will still show up on the first day of work with a lot of personal business unsettled.”
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In 2011, Krasman and Ellman began sculpting what UrbanBound is today: a way to give robust relocation benefits “to the masses.” First, they created content, aka a directory including information about Chicago that people moving here might want to know. (World Business Chicago even provided a bunch of extra informational CD-ROMs about Chicago to send off to newly-located Chicago employees.)
UrbanBound invited the larger employers of Chicago to join the platform and started getting hundreds of submissions every single month, which was enough data and leverage to raise a $1 million seed round. The seed funding allowed the team to keep working and to finally pivot from both a B2B and B2C model to just a B2B model.
“We’ve pivoted a couple of times: when we started, we had two different sales strategies because 6.8 million Americans move each year for just a job,” Krasman said. “We thought we could become a preeminent destination for those Americans. The challenge that we saw early on was a very costly onboarding process for consumers, since they tend to be the most price-sensitive. In about 2012, we abandoned focus on that channel.”
Today, UrbanBound focuses on the “very real problem” of helping companies relocate thousands of employees each month - and doing it affordably by negotiating group buying deals with service partners like movers, real estate networks, etc.
“The core of our product today is educational content (about the process, the city/neighborhood, schools, crime),” Krasman said. “We help organize the entire relocation start-to-finish by connecting to the vetted network of service partners.”
Now that the product is nailed down, the ball just keeps rolling: last year UrbanBound raised $5 million from Grotech Ventures and StarVest Partners for R&D and sales efforts. Today, UrbanBound has over 120 of the largest employers in the world (think Salesforce, LinkedIn, Groupon) using the platform and they are adding about one to two Fortune 1000 companies a week to that roster. Next up, is expansion of UrbanBound offerings to support international relocations with an extended vendor network and content on international cities.
Though they’ve set their sights far and wide, UrbanBound is still deeply rooted here in Chicago:
“There is such an amazing, close-knit group of entrepreneurs that have been around the block many times before,” Krasman said. “What’s great about it is that so many of the local leaders are willing to give their time. And within the HR community there is a whole network of really forward-thinking HR professionals that are ready to give you real-time feedback.”
