4 ms·

Checkr is minting money. I doubt they needed this cash infusion, but it could make sense to drive even more growth. Almost all of the on-demand companies (Uber

Checkr is minting money. I doubt they needed this cash infusion, but it could make sense to drive even more growth. Almost all of the on-demand companies (Uber, Lyft, DoorDash, etc.) use the service to screen independent contractors. The kicker is that independent contractors often sign up for many of these services, so Checkr can turn around and sell the same data that they pull for 1 individual to 3+ companies at ~$15+ a pop.

orange_county 9y ago
Depending on regulations of this, I doubt they can resell. Especially if each background check is done days apart from each other. You may run into a scenario where a felony case was recorded in between background checks.
- ben_jones 9y ago
  Armchairing but it seems likely that some of the data can be reused, for example historical data like maybe country of origin, residential addresses, etc.
- gringoDan 9y ago
  Fair point. I can't speak to the regulations or ethics here. But in practice, with the number of ICs being activated daily, I doubt a low-level employee at an on-demand startup really cares or notices if the background check was run today vs. last week vs. last month. Even if it has to re-submit each time, given the volume of reports Checkr runs, it could negotiate such that the marginal cost of running a report decreases each time it is run for a given individual.
- erichurkman 9y ago
  I'd love if they could re-use data to temporary supplement checks that take a long time. Some background checks can take _ages_ for certain counties, especially if they were a city/county employee, a police officer, or lived in some rural county that only does background checks via paper or fax and their city office is only open 10am to 3pm two days per week. If Checkr could tell me immediately, "We submitted the requests, but they may take a long time, so here's Bob's clear background check as of 2 years ago while you wait." (I've had a few background checks via Checkr take many weeks or more, meanwhile the employee is left in limbo. 98% were quick, but those 2% were painful; not Checkr's fault of course.)
  - RoboErectus 9y ago
    Here's the process to find criminal records in San Francisco: 1) Walk into the courthouse 2) Go find which binder has the first letter of the last name of the applicant 3) Flip through the dot-matrix printed green/white reams of printed papers to see if someone with a first and last name has a court record 4) Write down the case number on a form with a bunch of other info 5) Go wait in line and hand it to the clerk 6a) If it's a record they have, you can go into the back and view it with a clerk watching to make sure you don't steal or adulterate the record. It's the only copy. 6b) If it's not in the courthouse, they'll tell you to come back in a few days while they pull it from the archive. 7) If you had many records to pull, some courts will restrict you to a max of 1-2 per day. So you either have to send lots of people, or just wait. Some courts like Santa Barbra can take 120+ days. This is true for lots of counties in the US, and it takes getting involved in local politics to fix it. A lot of Americans can't make rent if they don't get their next paycheck, and a long background check can be really stressful. It's a hard problem, but it's getting better. I could go on :)
hangonhn 9y ago
"I doubt they needed this cash infusion, but it could make sense to drive even more growth." I doubt that's the case. If it is, then their management just made a huge mistake. Raising money always has a cost attached. Raise enough money and your exit strategy becomes very constrained -- i.e. fewer companies have the capital to acquire a company with higher valuations. Eventually IPO becomes your only option. Your investors would also expect you to generate a good ROI on the money they gave you. Unless the terms are ridiculously good, you shouldn't raise money willy-nilly. Checkr doesn't seem like a company that requires insane growth. There's no network effect to exploit. I doubt each additional customer or each additional background record improves their business on an unit by unit basis.
- mywittyname 9y ago
  It's a smart business move to get investors on-board who are also investors in the company's potential clients. The obvious benefit being that they can push/suggest that management use your product, the less obvious benefit is they are less likely to start a competing business.

orange_county 9y ago

Depending on regulations of this, I doubt they can resell. Especially if each background check is done days apart from each other. You may run into a scenario where a felony case was recorded in between background checks.

ben_jones 9y ago
Armchairing but it seems likely that some of the data can be reused, for example historical data like maybe country of origin, residential addresses, etc.
gringoDan 9y ago
Fair point. I can't speak to the regulations or ethics here. But in practice, with the number of ICs being activated daily, I doubt a low-level employee at an on-demand startup really cares or notices if the background check was run today vs. last week vs. last month. Even if it has to re-submit each time, given the volume of reports Checkr runs, it could negotiate such that the marginal cost of running a report decreases each time it is run for a given individual.
erichurkman 9y ago
I'd love if they could re-use data to temporary supplement checks that take a long time. Some background checks can take _ages_ for certain counties, especially if they were a city/county employee, a police officer, or lived in some rural county that only does background checks via paper or fax and their city office is only open 10am to 3pm two days per week. If Checkr could tell me immediately, "We submitted the requests, but they may take a long time, so here's Bob's clear background check as of 2 years ago while you wait." (I've had a few background checks via Checkr take many weeks or more, meanwhile the employee is left in limbo. 98% were quick, but those 2% were painful; not Checkr's fault of course.)
- RoboErectus 9y ago
  Here's the process to find criminal records in San Francisco: 1) Walk into the courthouse 2) Go find which binder has the first letter of the last name of the applicant 3) Flip through the dot-matrix printed green/white reams of printed papers to see if someone with a first and last name has a court record 4) Write down the case number on a form with a bunch of other info 5) Go wait in line and hand it to the clerk 6a) If it's a record they have, you can go into the back and view it with a clerk watching to make sure you don't steal or adulterate the record. It's the only copy. 6b) If it's not in the courthouse, they'll tell you to come back in a few days while they pull it from the archive. 7) If you had many records to pull, some courts will restrict you to a max of 1-2 per day. So you either have to send lots of people, or just wait. Some courts like Santa Barbra can take 120+ days. This is true for lots of counties in the US, and it takes getting involved in local politics to fix it. A lot of Americans can't make rent if they don't get their next paycheck, and a long background check can be really stressful. It's a hard problem, but it's getting better. I could go on :)

hangonhn 9y ago

"I doubt they needed this cash infusion, but it could make sense to drive even more growth." I doubt that's the case. If it is, then their management just made a huge mistake. Raising money always has a cost attached. Raise enough money and your exit strategy becomes very constrained -- i.e. fewer companies have the capital to acquire a company with higher valuations. Eventually IPO becomes your only option. Your investors would also expect you to generate a good ROI on the money they gave you. Unless the terms are ridiculously good, you shouldn't raise money willy-nilly. Checkr doesn't seem like a company that requires insane growth. There's no network effect to exploit. I doubt each additional customer or each additional background record improves their business on an unit by unit basis.

mywittyname 9y ago
It's a smart business move to get investors on-board who are also investors in the company's potential clients. The obvious benefit being that they can push/suggest that management use your product, the less obvious benefit is they are less likely to start a competing business.