Crop doesn’t wait. And American agriculture has been facing a labor crisis for decades, resulting in the wastage of $3.1 billion worth of food.
Farm labor employment has fallen by 75% in the past seven decades, according to the USDA. Filling in a crucial gap, migrant workers account for a majority of the agricultural labor force. In recent years fewer workers are migrating to the U.S. and those who do come have to go through the onerous H-2A program, a process peppered with inefficiencies.
Cofounders Michael Guirguis and Jordan Taylor have set out to fix this problem with Seso, a startup that connects farmers who need workers and migrant workers who need employment.
“Farmers want to farm. They’re not good at paperwork,” says Guirguis, whose startup is digitizing agricultural recruitment and payroll processes, most of which to date is done with pen and paper.
Seso provides farmers with visa automation for migrant laborers, government regulatory compliance, an employee database and management tools to ease an administrative documentation process riddled with complications. The startup issued 5,500 agricultural workers with H-2A visas in 2021.
Almost a year after the labor marketplace launched, Seso announced Thursday it raised $25 million in a Series A round led by Index Ventures with Founders Fund, NFX, and K5 Ventures participating.
Founded in 2019, the company has 35 employees and 77 customers including some of the largest farms in the country. Farmers who use the startup’s technology to recruit and manage migrant workers span a broad spectrum including a South African ostrich farmer, sheepherders in Utah, and a bee farmer in North Dakota.
Farmers have traditionally relied on middlemen to bring in H-2A workers. Mistakes in the tedious visa application process have resulted in late arrivals of workers and ultimately billions of dollars worth of wasted crops. “The program requires you to work with four or five different government agencies,” Gurguis says. “It is so complicated, it was never meant to succeed. It is a broken system.”
B.T. Loftus Ranches, one of the longest-running hop farms in Yakima Valley, uses Seso’s technology to communicate with returning employees, many of whom live in rural areas without cell service. Seso, which also has employees in Mexico, helps arrange transportation for migrant workers to reach the consulate safely and as a result, it has reduced 70% of the work that fell on the HR department.
“The logistics of having to locate the workers was definitely a big hurdle that we had to overcome every year,” says Alex Munoz, director of human resources at B.T. Loftus. “By having a recruiter that reaches out to the workers via different platforms, it has definitely made our contract process run smoother.”
Before building a workforce management portal for the agricultural industry, the 32-year-old CEO worked at the White House on the National Economic Council, developing employment and housing policies. Gurguis, whose parents are from Egypt, graduated from Stanford University in 2011 where he studied labor policy and economics. “I realized I don’t want to be a policymaker, I want to use technology to create jobs. So I knew that I was going to, at some point, start a labor marketplace startup because that was my passion.”
Juan Ramos, who is in the U.S. on an H-2A guest worker visa, picks oranges for Sorrells Brothers Packing Co. Inc in Arcadia, Florida. The number of H-2A positions requested and approved has increased more than fivefold in the past 15 years, from 48,000 positions in 2005 to over 275,000 in 2020.
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Elizabeth Ortiz Zarate is a 28-year-old Mexican migrant worker who works for plant retailer, Bonnie Plants in Utica, New York. She came to the U.S. on an H-2A visa, the only uncapped visa in the country. The H-2A program allows American farmers to recruit seasonal workers from other countries for up to 10 months, only after demonstrating that they were unable to find domestic labor to fill the position.
In Mexico, Zarate worked as an industrial engineer, earning $450 per month, but in the U.S. she is able to earn roughly $3000 per month as a seasonal worker. She sends most of her income home to her grandparents. “The H-2A program allows you to come into the country without putting your life at risk going through the illegal immigration process that’s dangerous and can lead to extortion,” Zarate says. “It gives you an opportunity to earn an honest wage and learn new skills.”
Seso charges farmers roughly $5,000 as a compliance software fee and application fee for its services, although the rate varies depending on services used by the farmer. The company made $3 million in sales in 2021, Guirguis tells Forbes.
“Seso has built so much trust within agriculture that their customer base looks to them to automate more and more of their workflow, which is a characteristic present in some of the best vertical software companies,” says Nina Achadjian, a partner at Index Ventures.
Migrant workers, one of the most exploited populations, largely remain unbanked and have to be paid with a check. With the fresh round of funding, the startup plans to embed financial and payroll functions into its technology so that workers don’t have to lose 10% of their paycheck in remittance fees.