In this webinar, Erica Pearson, co‑founder and CEO of Vacation Fund, shares the story behind the startup and its solution to employee burnout. After experiencing 12‑14 hour workdays in capital markets, she recognized that ambitious talent is lost to unsustainable work cultures. Vacation Fund offers an employer‑matched travel savings program: employees direct a portion of each paycheck into a dedicated vacation account, and employers match 25‑100% of contributions, typically capped at $500‑$1,000 per year. The service is sold to companies for a flat $2 per employee per month subscription, with additional interest from travel partners for targeted offers. Since launch on Dec 1, 2018, the company has onboarded five pilot employers, is in talks with 13 more, and has a waitlist of 46, generating roughly $430 k in annual recurring revenue. The platform acts as a fund administrator, handling tax‑treated cash‑bonus matching, and provides withdrawal via Interac e‑request in Canada and ACH/SVB arrangements in the US. Erica discusses integration challenges with existing HRIS/payroll systems, positioning Vacation Fund as a niche, complementary benefit rather than a core HR module. She outlines customer acquisition tactics (LinkedIn, HR/fintech events, referrals), the competitive landscape (two direct rivals in Toronto and Orlando), and the long‑term vision of a travel‑goal mapping dashboard for employers. The company aims to be cash‑flow positive within 24 months, scaling the team from four to 8‑12 members, and plans a US expansion via benefits brokers and HR consultants. The Q&A covers tax implications, withdrawal mechanics, usage restrictions (must be tied to time off), and future monetisation possibilities.
Chapters
We're going to go to Vacation Fund. It's a Toronto graduate presented by Erica Pearson, who's the founder and CEO. Erica, the floor is yours.
Awesome, thank you so much. All right, so my name is Erica Pearson and I am the co-founder and CEO of Vacation Fund. Now, out of school, I had the privilege of getting hired into capital markets. I was earning great money. I could see a very clear path for career growth. And I was working in a city that I loved. But not too long into one of my earliest roles, I knew I couldn't stay. I was working 12 to 14-hour days. I was working on weekends. I was working on evenings. I was on call at all times. I missed dinners and celebrations with loved ones. I did not have time to work out or get a good night's sleep. And I was expected to bring my phone on the one vacation that I managed to take during a very slow time of the year. And the day that I quit, I remember wondering how many ambitious people my company lost every year due to burnout. And I knew that I wanted to help people like me be ambitious in their careers and make time for their priorities outside of work. Because especially when there is a war on talent and your employees could be poached at any given time, burnout culture is just not sustainable. So, on December 1st, our team launched a website for vacation fund, an employer-matched travel savings program that incentivizes employees to put money aside and take meaningful vacations every year. It allows employees to direct a portion of their paycheck into a separate vacation fund account and allows employers to match anywhere between 25% and 100% of the contribution, capped at a certain dollar amount annually. Now, for companies, this is an easy way to invest in employee satisfaction, productivity, and retention. Not only does it make employees' DreamTrips more financially attainable, but it encourages employees to use their days off to travel, which has a positive impact on both their satisfaction with their company and their role within the company. So we've onboarded 5 pilot companies since February 2018. We are in discussion with another 13 companies, and we have an additional 46 companies on our growing waitlist, all equating to over $430,000 of annual recurring revenue. Now, we make our money off a subscription fee of $2 per employee per month. But we also have a vast amount of interest from travel companies that would like to send targeted unpublished offers to employees through our platform. And as a company, our big target, following an expansion to the US market later this year, is to help make 1 million travel dreams happen by 2021, with the help of benefits brokers and HR consultants as our distribution partners. Now our growing full-time team is stacked with the business mind, the technical mind, and the creative mind. All of our technology has been designed and built internally from scratch, and both our team and our advisors believe in our vision for the future in which people live happier, more balanced lives. Thank you.
Wow, I was taking notes and avidly listening. That's great. Okay, so I want to remind everyone that if you have questions, there's a chat thing on the right. If you can do your best to answer them, my team will pull out some of the more interesting ones and try and get them on screen. Well done, well done. Let's do a big round of applause. So I have a question, but Mark, I want to cede the floor to you first if you have a question, and we'll start getting questions from the chat as well.
Okay, awesome. Yeah, I just want to say a great pitch, like right to the point, answered all the questions I wrote beforehand. Great customer development. My real question for you is, as someone who's worked with HRIS systems in the past, you know, employee benefits, RRSP contributions, all these are managed within HRIS systems today. How do you maintain—
and I think I know the answer, but I want to hear from you—
how do you keep yourself as an individual product and not become a feature of a large Workday, SuccessFactors, SAP, etc.?
Yeah, yeah, no, absolutely. And obviously, and we've, we've been very sort of after our pivot, been very focused on, okay, what else is out there? What do people use for HR? What do people use for payroll? And how does this fit into the whole ecosystem? And And what's worked nicely for us is that with this being a very niche and a very specific offering, we hear over and over again from very forward tech companies that have a million other platforms on the go that vacations are near and dear enough to people's hearts that they're eager to start putting money towards this specifically. And then to know that this is a thing where your money is being put aside so that you can take a vacation every year. So most companies, for additional context, are doing a 50% match on people's vacation saving. Capped at anywhere between $500 and $1,000 annually. So it's significant enough that it encourages the employee themselves to put the money aside, and we essentially act as a fund administrator, making sure, okay, look, this is a separate thing encouraging you to take advantage of your vacation days. We're helping clarify company messaging and expectations around taking time off. And then obviously there's a massive opportunity in the travel space to provide value-add, including helping people estimate trip costs and actually put the money towards a very specific trip. But for right now, we are just helping sort of administer the program and we're learning from our clients right now, what do they need to see out of this? And people have been very forward about like, oh, this is like addressing a very specific pain point. And if we were to sort of close the loop around where this money actually gets spent, this is what we would wanna do because we have some other scenarios where people have said, look, this can only go towards these packages with this travel partner. And we thought, had other people say, well, some people actually have newborn kids at home and need a staycation. In that case, what does the money go towards? So there's enough monitoring of the program that needs to take place that most people have said, I think people are eager to log into this. And obviously, longer term, being able to put a map in front of a company saying these are all the places your employees have traveled to, and you could walk across the room and ask the person, oh, your trip to Peru, like, I see that you did this trip last year. I'm planning one. Let's— so turning it into an engagement and a value add. Platform longer term is obviously the main idea.
There are questions coming in. I don't mean to cut you off. You're over-answering a little. So Edward was— and we got a lot of questions. So Edward was asking, what are the tax implications to the employer for matching funds?
Right. Yeah, absolutely. So we're treating this, and we've talked to, I guess, sort of the Achievers in the league about this being a taxable benefit and how that's taxed and how some people have ended up being taxed after the fact with certain programs. This is treated as just a separate vacation cash bonus that people are earning. Every year. So it is treated as a cash bonus. And that's just been the easiest way for people to wrap their heads around it.
And then Rika, I guess is how you pronounce the name, is what's your timeline to reach breakeven? Obviously, that might be— it's hard to say, but if you can give an estimate for Rika, that would be great.
Yeah, no, absolutely. In a perfect world, we are cash flow positive 24 months from today. We are working through where it's not publicly announced yet, but we will be in Chicago for another accelerator this summer. And so working through, okay, this is offered in the US market and the Canadian market. We've worked through what deposit taking looks like in both countries. And then obviously just getting to a point where, okay, we're a 4-person team right now. This needs to be an 8 to 12 person team this time next year to hit all our metrics. So that's the best estimate at this point.
Sari is asking, I hope I pronounce your name right, how do you get the money out? I presume as an employee. So I want to take it on vacation and I have the savings fund. What's the process? Process?
So in Canada, we're actually working through a strategic partnership with one of our clients. Interac wants to offer this to their employees, and for in Canada, it's an Interac e-request. So you can just literally pull it back using Interac into your account. And in the US, we're talking to a few sort of B2C and B2B fintech players about like our deposit-taking institution. Right now, it's looking like it's Silicon Valley Bank will be the best option for us longer term. We've talked to a few others, but, um, that we're working through in terms of the ACH processes Maybe we end up using Douala for the time being. We've listened to other people's experiences and just heard, okay, how do we get this up and running as quickly as possible to authorize people's bank accounts?
So, okay. And then there are a lot of questions here. So if we can't get to all your questions, we're— because I want to get through a few more, try and answer them very quickly. You can maybe write answers to them offline when, when we're done. Yeah, I'll have to go sequentially and then hit some big ones. But how are you attracting your first customers? Adam is asking.
Yeah, no, it's actually— so the— as of yesterday, it's been 66 companies that have been all inbound inquiries since December 1st. So whether it's— we've done some posts on LinkedIn. So LinkedIn has been a great one. I really enjoy pitching. I'll give Founder Institute some credit for that. So whether it's like HR tech, fintech, and travel tech events, I have been pitching everywhere just to sort of build awareness and tell our story. So, that's been very powerful. And then, honestly, just referrals. People that are currently building their benefits packages and wanting to incorporate something new and millennial and combating burnout. So—
Nathan's asking about percentage versus just the $2 subscription fee. Do you take any percentages?
Not as of right now. It's just been like the best situation for us is to get this in front of as many people as possible and learning what our clients need to understand. And so, we considered it being a total amount of the amount that's put aside. But right right now that's just more difficult. It creates more headaches than it solves problems.
Ken wants to know, can, uh, well, there's a couple questions. Jerry wants to know, does the fund cover the family? And Ken wanted to know, can you buy a car with the money? So family, car, maybe some, uh, you know.
Yeah, yeah, I know, it's interesting because we, we, I literally was just on the phone with a client talking about, well, if you're not forced to spend this money with one of your specific travel partners, then how do you authorize that this money is going towards a vacation? So the idea is just that when people take time off, it's in their best interest to actually travel with it. But if they were using it for something that just helped them rejuvenate or relax a little bit, like ordering catered meals for their family, that's fine as well. So for right now, it's literally just a few questions when they request to withdraw, saying, one, have you asked for some time off? So ideally the money is being spent on something, on some kind of experience while they're not at work, while they're taking at least 3 consecutive days away from the office. And then answering sort of the next question of, so one, have you asked your boss for the time off? And two, what is this money actually going towards? We have people setting travel goals within the platform and setting goals for the actual experiences themselves. But again, this is something where we've gone to our clients and said, how, how difficult do you want this to be for them to pull the funds back? And do you need them to upload a receipt, for example, for the time being? So it's something we're working through with our clients now.
Okay, we've got so many questions in here, this is amazing. So you're really going to have to go into the chat and answer some of them. So stay patient, everyone. Hopefully you'll get your questions answered in the chat. I want to get to the next presenter. Maybe I'll leave you with a last question about competitors. I forget who asked that, but there was one last quick answer on any competitors in the market before we move on to our next pitch.
Yeah, we've had 2 direct competitors pop up in the last few months. Obviously, we know that we're doing something worthwhile that can be very value-add. One out of Toronto, actually, and one out of Orlando. But if anything, like, I'm just happy that it's changing the conversation for what employees today need. So, and again, any— happy to answer any further questions in more depth. My email address is erica@vacationfund.io. And if I can't get to all of the questions in the chat, please feel free to email me after.
I know, let's do a big round of applause. Well done, well done. I mean, and there's so many questions. I've done a lot of these webinars, I haven't seen this many questions. So audience, high five. Erica, go in the chat, you start answering as best you can.
