Starting Up: This startup founder wants to disrupt ‘nightmare’ leave management systems

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Mahima Chawla, co-founder and CEO of Cocoon, told HR Brew that the idea for a leave-management platform began with an offhand comment from a colleague.

“Parental leave is an absolute nightmare,” Chawla recalled a coworker mentioning, adding that the coworker even brought her laptop into the hospital room after a C-section in order to file the correct state paperwork in the allotted time period.

In 2020, Chawla set out to simplify the complicated world of leave for HR, managers, and employees alike with a single platform that navigates all the different aspects of planning a leave, whether it be parental, medical, caregiver, or bereavement.

“It’s become a lot more complicated for HR teams, just given distributed workforces and also ever-changing laws…so as an HR professional, it’s challenging to keep up with the regulatory landscape,” she said.

Employees on the Cocoon platform plan their leave by answering a series of questions that provides them with “the guardrails for planning a leave that is compliant and also within the…confines of your employer policy.”

“We essentially have codified all of the different federal and state laws around legally protected time that individuals get and then also pay sources…all the different state insurance programs that exist,” she said, adding that the “rules engine” identifies the applicable leave, as well as when and how to apply.

The platform also notifies people managers of their employees planned leave and helps HR teams navigate compliance and payroll calculations.

The startup had raised $26 million in funding by September 2021, from investors including First Round Capital and Index Ventures, among others, as well as an undisclosed sum from ADP Ventures last fall, according to Chawla. Cocoon has grown to service hundreds of businesses, including Carta, Curology, and Khan Academy.

This interview has been edited for length and clarity.

What specific issue in HR does your company intend to solve?

Today, leave and absence management is a complicated, fragmented process because the US does not have federally mandated paid-leave policy guidelines. The result is a patchwork of protections at the state level, which has become a huge pain point for employers. This problem has been compounded by the shift toward distributed workforces, where organizations now have to navigate leave management for employees that work across different states—all while staying compliant with the various federal, state, and local leave policies.

It’s always been the employer’s responsibility to manually navigate eligibility and payroll calculations when an employee files for leave. This process is more error prone and takes extra time for employers to chase this information down.

What product or service does your company offer?

Cocoon is leave-management software for the modern era. Most leave providers only manage certain pieces of the puzzle, or handle key tasks like determining eligibility, calculating payroll, or helping employees plan a leave and file claims manually.

Cocoon’s platform automates the complexities of taking and managing employee leave—from compliance and leave planning, to claims, payroll, and tracking. This allows employers to seamlessly navigate leave and absence management, while making it easier than ever for employees to privately plan a leave, file claims, and track their pay.

The company was founded amid the Covid-19 pandemic and amid the growth of WFH policies. Did this impact how Cocoon grew?

It just happened that this was the problem that I was really focused on solving, and it happened to be during Covid where you did have this dispersion of the workforce…There was really a huge, massive need…we felt from employers during that time who were trying to deal with so many different things with their workforce, including [staying] compliant…[with] employees who suddenly spread out everywhere.

One of the effects of Covid is that I think it really created that deeper integration between work and life for people. Suddenly you had people that were working from home, that weren’t [before]. We had to adjust all of our different ways of working, and then it also brought families to the forefront, around people’s caregiving needs.

What’s next for Cocoon?

When we think about what’s next, we really think about rapid expansion of the product suite to handle more and more types of leave; to handle more and more types of employees on the platform—so, different employee segments, whether you’re parttime or hourly, being able to expand the surface area of the product to be able to serve more and more customers.