Running payroll is hard in any country, but perhaps especially so in Brazil thanks to consistently changing laws and extremely influential unions that make it significantly harder to get it right. Fernando Gadotti struggled with this as the co-founder and CEO of DogHero, LatAm’s version of Rover. When Gadotti left the company in 2022, after selling it in 2020, he decided this is where he wanted to focus next.
“Every time the payroll came around, there’s just a struggle, like it’s dreadful, many hours, just like double-checking data back and forth, and we couldn’t really get any insight that we needed,” Gadotti told TechCrunch. “[We were] pretty much working in the dark, and as we kept growing, it hit me that these problems really weren’t just inconvenient; they’re actually slowing the company down. We’re wasting a lot of time in busy work.”
Just a few months after leaving DogHero, Gadotti started working on São Paulo-based Tako, an employee life cycle platform that automates tasks like onboarding and payroll to save companies time and bring all their employee information into one place. Tako also provides employees with a dashboard to view information and access an interactive paystub meant to increase transparency.
Gadotti said that while there are U.S. legacy payroll companies operating in Brazil, like ADP, it makes sense to have a local solution because Brazil’s payment system is quite unique. He said laws around payroll change frequently. There are also 10,000 unions — companies often have employees in more than one, he said — that update their rules a few times a year, too, and sometimes have more power than the actual laws.
Tako uses an LLM (large language model) to keep up with these constant changes. The LLM ingests the labor law and union law data and digests it so Tako’s developers can keep the code base up-to-date. He said they want to keep humans in the loop to ensure accuracy, but having the LLM get a head start saves a lot of time.
Tako launched its product in 2023. Gadotti said that the company processed tens of millions of dollars in payroll as its been operating in stealth but declined to share more details on its customers. Gadotti said the company is currently targeting mid-market white-collar companies with between 100 and 500 employees in the professional and financial service categories.
“The strategy we took is that we are not trying to boil the ocean,” Gadotti said. “We want to start in a segment we know before venturing into industrials or more complex areas. We are starting in more simpler segments; as the company evolves, we are going to more complex segments in the future.”
Tako is emerging from stealth with a sizable $13.2 million seed round co-led by Ribbit Capital and Andreessen Horowitz. The round also included ONEVC and the founders of Ramp. Gadotti said the company plans to put the majority of capital toward research and development in addition to doubling or tripling headcount on its R&D team.
There are a lot of potential areas that Tako could expand into in the future, like the vast world of employee benefits. Gadotti said the company does plan to expand as it grows into building more features like instant payments.
In addition to competing with legacy companies like ADP, there are multiple other HR tech startups in the country like Gupy and Caju, which are both more focused on other areas within HR and employee management. But if Tako expands into these areas, which it likely will, these companies could also become strong competitors.
The name Tako is Japanese for “octopus,” which Gadotti said is how he thinks about the business. Tako’s platform is meant to be the brain of employee data with its tentacles reaching out into different areas of employee management.
“We want to focus on the whole employee life cycle,” Gadotti said. “We are constantly listening to our customers’ pain points and where they want us to help them on.”