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Astro, a Latin American startup that helps talent build and manage teams of developers, came out of stealth today with $13 million in Series A funding from Greycroft, with participation from Obvious Ventures and other unnamed investors. In an interview with TechCrunch, CEO Jacqueline Samira announced the official launch of the Astro platform today. Previously, the only way to become a client was through an existing referral.
It is well established that there is a severe shortage of experienced software developers. In a February poll by Infragistics, more than half (53%) of software developers and IT professionals said the biggest challenge this year was hiring developers with the right skills. If the worst comes to pass, the skills gap could worsen in the coming years, with the US Department of Labor estimating that the global software engineer shortage could reach 85.2 million by 2030.
Samira and Astro’s co-founder Frank Liese founded Astro after experiencing the effects of the developer shortage. At the same company before starting Astron – OwnLocal – they found it difficult to compete with high-tech companies on talent. Samira and Lycea expanded their search beyond Austin, Texas, where OwnLocal is based, to work with outsourcing partners in Latin America. But this presented its own challenges. OwnLocal couldn’t determine salary rates, benefits, and perks, and had little visibility into its performance beyond monthly receipts.
“Our team members were unhappy with the outsourcing company they were working for, as traditional outsourcing firms tend to attract non-tech clients and their culture revolves around billable hours,” Samira told TechCrunch in an email. “With very limited engineering talent to hire, we were stuck with three uncomfortable options for building our engineering culture: outsourcing our entire production, managing a large freelance team, or outsourcing our engineering culture. We wanted our own team—our own offices, computer equipment, Salaries, benefits, etc. But setting up a foreign entity and figuring out how to hire in a foreign market was distracting and difficult—not to mention payroll, benefits, procurement, legal compliance, and more.
Samira and Astro jointly launched Astro as Austin Software in 2018 to address these avenues for recruiting developer talent in Latin America, particularly countries such as Colombia, Chile, Argentina, Uruguay and Mexico. Astro hires English-speaking, mid-level and senior-level developers to set up offices where they can work together, using an algorithm to match the developers with jobs at tech companies in the US.
Samira — who refuses to pay Astro developers average wages compared to American workers — insists the platform is not exploitative. Astro-affiliated developers receive PTO according to their country’s local laws and are paid at the beginning of each month, hours are based on agreements between Astro clients and individual developer teams. Astro supports developers with salary and promotion reviews, Samiram said, assigning engineering consultants who support growth within the developer team.
“Hiring for large-scale developers is a data problem similar to an algorithm,” says Samira. “Amidst the spectrum of developers and customer needs, there is a sweet spot that delivers the fabled ’10x engineer’ experience for both the customer and the developer.
Astro uses surveys to find this “sweet spot” by collecting a variety of performance metrics from its engineers—including vague measures of engagement, happiness, and satisfaction—and combining them with a personality profile to compare the sum to a score Astro measures for customer engineering complexity. Samira says this approach helps reduce common risks associated with outsourced teams, such as inadequate problem statements, project clarity and poor communication.
This is a wise call, as imported code generally gets bad coverage for poor quality assurance testing and affects the morale of US-based employees.
But – leaving aside the existence of compliance with individual profiles and “happiness” parameters – it is not entirely clear whether the developers in Astro’s employ feel comfortable with monitoring. As a current piece in The New York Times Spotlights, workplace surveillance software is becoming more and more common — but employees aren’t necessarily happy. In the year According to a 2021 ExpressVPN survey, nearly a majority believe that tracking software is a breach of trust, and would consider stopping a company that uses it.
Samira stressed that developers can opt out of tracking if they want.
“We prefer a human-first approach supported by technology,” she said. “Our engineering consultants conduct one-on-one checks with Astro developers – and with our customers – to understand each individual’s motivation, engagement and project progress. Our consultants collect reference information from the developer’s team members in Latin America and the US on our platform and add it to regular surveys. If a developer decides to opt out of everything, we still have an understanding of developer health by understanding the perspective of the rest of the team.
Simra added, “Our platform provides a bird’s-eye view of the root cause of project risks: team risks. The information and transparency we provide to companies and their management helps to avoid issues.
It is clearly an argument that will convince customers. Astro claims to be profitable and cash flow positive, with a total of 47 companies with $17 million in annual revenue from a customer base.
There is no doubt that the broader shift towards outsourcing in software dev will strengthen business. According to recent research from Commit, exports alone are expected to increase by 70 percent between 2022 and 2023.
Samira continued, “The pandemic has only helped our business because people are now more receptive to remote workers. “Also, the broader slowdown in technology over the past few months has definitely impacted companies without real traction or revenue streams. Legal companies still have a lot of runway, but they need to keep building new features to stay afloat, which is why they need tech talent more than ever.”
Astro plans to use WarQuest — $15.9 million, including Series A capital — to develop a payroll solution for global workers outside Astro’s network, improve Astro’s matching algorithm and “enhance” its engineering marketplace. The company currently employs 213 developers and plans to increase the number to 300 by the end of the year.
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