Customers of San Diego-based Blueboard were surprised to learn that the experiential employee recognition platform had shuttered last week. Now, HR teams at the platform’s clients are running interference as many employee recipients are left wondering if there will be recourse for being unable to cash in on experiences they’d earned.
According to Pitchbook, Blueboard had over 200 employees as of 2023 and had raised $24 million. A former employee stated that the platform had more than 500 clients when the firm shut its doors.
Founded in 2014, Blueboard allowed employers and managers to distribute recognition to employees for any reason, from work anniversaries to team building, in the form of experiences. Employees were then able to order and redeem rewards awarded by the employer through their user accounts.
When HRE reported on Blueboard in the summer of 2023, there were many classes and outings available for employees to select as rewards, including coffee-brewing classes, spa days and farm tours. However, when the company ceased operations last week, many employees were in the process of redeeming their rewards, according to reports on social media. According to comments HR practitioners at client companies made on social media, employees were told directly by Blueboard that these pending rewards wouldn’t be fulfilled.
“Without any prior warning, the HR team and all of our employees with pending Blueboard awards received an email that they are not able to fulfill any more experiences, effective immediately,” wrote one Reddit user. “The website is shut down.”
Blueboard customers await updates
Scott Broomfield, Blueboard’s former chief financial officer, explained the abrupt shutdown on LinkedIn late last week. He said the firm’s secured lender foreclosed on its assets and “swept” its bank accounts.
This is the first closure of a rewards platform in the HR tech space in 2024. However, in a report following the HR Tech Conference in the fall, analysts from RedThread Research predicted that this year, many “relatively small HR tech vendors” that secured investment funding over the last two or three years are starting to run out of those funds, and it’s much harder to raise a new round right now.
The VC arena for HR tech has returned to “normalcy,” as noted by WorkTech, after a record-setting season that kicked off in early 2021 and continued through the second quarter of 2022. According to Pitchbook, Blueboard’s latest funding was $9.3 million, raised in late 2020 from a Series A round.
“While this was unexpected, [the lenders] were within their legal rights,” wrote Broomfield. “We wish they would have informed us so we could have worked out a cooperative restructuring agreement.”
The former CFO said that Blueboard’s board hired The Ravix Group as the Assignee for the Benefit of Creditors (ABC), which is a business liquidation tool accessible to an insolvent debtor as a substitute for formal bankruptcy processes.
He also wrote that a “provider” may “help with some relief and partially take care of” employees of Blueboard clients.
Broomfield said that conversations between the provider and customers could begin as early as March 18. He also apologized to customers and thanked the Blueboard team. According to Broomfield, Blueboard delivered experiences to over 175,000 people over the past nine years.
The rewards category is gaining traction in the HR tech environment. According to the 2023-2024 HR Systems Survey from Sapient Insights Group, recognition platforms were included in the top five systems purchased last year.
Salt Labs establishes relief fund
Meanwhile, competitor Salt Labs, a rewards platform designed for frontline workers, has established a relief fund for the workers of clients affected by the shutdown of Blueboard. Salt Labs has raised $18 million since launching in 2022 and has over 100,000 users on its platform.
“As industry leaders, we are taking the initiative to make sure we are there for the most vulnerable of the workforce and particularly want to support those who may have been saving their rewards for an experience they couldn’t afford from their paycheck,” said Jason Lee, founder and CEO of Salt Labs.
The $20,000 relief fund is designated for employees of Blueboard client companies who have pre-funded rewards that can no longer be fulfilled. According to a release, these individuals will have access to Salt currency for similar-value redemptions.
Former Blueboard client companies interested in joining the relief effort should apply to the Salt Labs website by 6 p.m. EST on March 20. Salt Labs has committed to prioritizing employers with a significant population of essential workers. Once accepted, employers will receive a Salt allocation to distribute among affected employees based on outstanding Blueboard redemptions.
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