Vancouver startup banks on a niche: unbanked seasonal farm workers

Digital payroll service Labora, which makes it faster and cheaper for temporary agricultural labourers to send money back home from Canada, plans to expand to the U.S.

Credit: Courtesy of Labora

Labora co-founder Rene Blanco (centre) with Mexican seasonal workers at Cedar Rim Nursery in Langley

Digital payroll service Labora, which makes it faster and cheaper for temporary agricultural labourers to send money back home from Canada, plans to expand to the U.S.

In a world where many people do their banking quickly and conveniently online, Canada’s seasonal agricultural workers have been left behind. Those visiting labourers don’t just toil in the fields—sending money home to their families in Mexico and other countries is a chore, too.

When Rene Blanco and Jaspal Brar looked at the problem, they saw an opportunity to build a business by helping seasonal workers save time and money. The result was Labora Consulting Services Corp., a Vancouver startup they founded with Ryan Klatt in 2018 while all three were executive MBA students at SFU Beedie School of Business. “The idea was to provide payroll transfer on behalf of seasonal workers, because so far, the current process has been done the same way for 50 years,” Blanco says.

For participants in the Seasonal Agricultural Worker Program (SAWP), the traditional remittance process is time-consuming and expensive. After getting a paycheque from the farm owner, the worker cashes it at the bank and takes the funds to a money transfer service. Their beneficiary back home goes to pick up the money and deposits it in the bank.

Remitting money can also be unsafe. “Sometimes they’re limited to sending $1,000, so if they want to send more of their paycheque, they have to use a third [party] to collect their money in Mexico,” explains Blanco, a Mexican who began studying at SFU in 2017.

Besides letting a farm owner transfer wages to a worker, who then deposits the money directly into a beneficiary’s bank account, Labora’s online platform offers access to T4s, tax returns, Canada Pension Plan contributions and records of employment. “Then also, we are helping them with the tax return submission,” Blanco says. “The idea is to provide full financial services to the workers.”

Given that temporary workers often return home each year after six or eight months, Labora helps them and their bosses keep track of important information. “All of that is stored when they log in, and it’s accessible by not only the farmers but even the actual employees,” Brar says.

From money transfers to taxes, Labora consolidates services that seasonal workers would otherwise have to access separately. “They sound pretty basic when they’re just on their own, but when you combine them all together, there really isn’t anyone in Canada that we are aware of, or even in the U.S., that’s managing those needs,” says B.C.-raised Brar, whose family previously owned and operated a farm. “That’s where our niche is slowly developing.”

Blanco and Brar, who is also director of operations at the Newton branch of Allied Insurance Services, have other ideas. In addition to joining forces with a telecom provider to offer mobile phone plans, they’re looking at selling group benefits.

Asked how big Labora’s target market is, Blanco says that in a typical year there are 50,000 to 60,000 seasonal agricultural workers across the country, half in Ontario and the rest mostly in Quebec, B.C. and Alberta. Labora, which has seven team members in Canada, currently focuses on Mexico, with support from its four-person Mexico City subsidiary. But the SAWP also covers about a dozen Caribbean nations.

Credit: Courtesy of Labora

(From left) Labora co-founders Jaspal Brar, Rene Blanco and Ryan Klatt

A volume business

And how does Labora make money? In the traditional remittance process, workers pay fees equal to about 5 percent of the total they’re sending home, Blanco notes. Labora charges 1.5 percent. “So we are less than half,” Blanco says. “It’s a volume business.” In future, the company could also charge small fees for mobile phone service and group insurance, like it already does for tax returns.

Incubated by Foresight Cleantech Accelerator and the Coast Capital Savings Venture Connection program at SFU, Labora has been racking up the honours. Last year, it won the Idea Prize at the Coast Capital Savings Venture Prize competition, represented Vancouver at the Startup World Championships in Montreal and was a top 100 finalist in the Telus Pitch contest. So far in 2020, the company has made the Ready to Rocket recognition program’s Emerging Rocket Agri-Food List and won the SFU Alumni Founder Award from the Coast Capital Savings Venture Prize.

Now refining its platform and ramping up marketing efforts, Labora has done six pilots in B.C. and Quebec. Three were with Cedar Rim Nursery, a Langley-based plant grower and retailer. This past summer, on behalf of six Mexican workers at Cedar Rim, Labora transferred some $20,000 to their beneficiaries’ bank accounts back home.

As Blanco points out, for eight months of labour in Canada, a seasonal agricultural worker can make $20,000 to $25,000—a large sum in Mexico. But money sent home often ends up being kept under the mattress, he says. By putting cash in the bank through Labora, Blanco explains, workers can establish credit to launch their own businesses. “We want to help them to build a credit history along with the banks, and when they retire from the program, they can do another agricultural activity in Mexico and serve the community.”

After completing more pilots, Blanco and Brar plan to expand Labora across the country and to the U.S. They’re also thinking of broadening their reach to serve temporary foreign workers of all kinds, who number upward of 600,000 in Canada alone. “When we decide to expand to the U.S., which I’m hoping happens sooner than later, that goes into the millions,” Brar says.