Cocoon Launches to Bring Clarity and Simplicity to the Employee Leave Experience

Company raises $26 million to take the complexity, errors and stress out of employee leave processes

New employee leave platform, Cocoon, publicly launched with the first full-suite software solution to completely eliminate the heavy lift from complex leave processes employers and employees are subject to today. The Cocoon platform is designed to address every type of employee leave across all 50 states, handling everything from compliance to claims management to payroll calculations. It factors in state, federal, company and insurance benefits accordingly to demystify, simplify and streamline the leave experience for both employees and HR teams. By doing so, Cocoon empowers companies to better support their team members and alleviates the stress that employees feel around taking time off to deal with often unexpected life changes, such as managing a serious health condition or taking care of a sick family member.

“We built a software platform that puts the employee first and allows them to focus on the reason behind their leave– all the while removing headaches, costs and complexity for employers,” said Mahima Chawla, co-founder and CEO of Cocoon.

The company also announced its $20 million Series A funding round, which was based on impressive momentum since the platform debuted to initial customers earlier this year. The round was led by Index Ventures, with participation from First Round Capital, SemperVirens, XYZ Venture Capital, Magnify Ventures, Springbank Collective, and prominent individual investors. Mark Goldberg, partner at Index Ventures who co-led Cocoon’s $5.5 million seed round with Bill Trenchard at First Round Capital in December 2020, has joined the company’s board of directors. Funds will be used for hiring and building out additional products.

“Companies are fighting harder than ever to level the playing field for workers. Parental leave is the tip of the spear in this movement, but it’s still shockingly hard to administer any type of employee leave given the web of paperwork HR departments and employees need to fill out to stay compliant with local and federal laws,” said Mark Goldberg of Index Ventures. “With two young kids, I’ve felt this pain point personally. Cocoon has built a totally seamless experience for companies and employees that makes it absolutely painless. This is one of the biggest opportunities within the future of work, and the speed at which Cocoon is getting pulled into companies big and small makes it one of the fastest growing companies in our portfolio.”

HR Technology News: Robert Half Ranked No. 1 Company for Remote Contract and Freelance Jobs in 2021 by FlexJobs

The Problems With Leave

Employee leave has long been one of the most antiquated aspects of HR, yet it is something every company has to deal with, as nearly every employee will go on leave at some point in their career. To date, the many moving parts of a leave have largely been managed manually with the heavy lifting handled by HR teams and employees. Given all of the different variables involved, from leave compliance to insurance claims, the process is extremely time consuming and riddled with human error that can yield significant and unnecessary costs to both employees and companies.

Still, new parents, caregivers or anyone dealing with a personal medical issue must juggle the alphabet soup of leave laws, dealing with the state and private insurance and spend a shocking amount of time on administrative tasks instead of being able to focus on the reason they took leave. Employers, on the other hand, are figuring out what an employee is eligible for, which compliance notices need to be sent and how to determine complex payroll calculations. This leaves little room to bring empathy into the experience and results in a completely broken system for all.

Employee leave is at a unique inflection point driven by COVID-19 as well as a rapidly evolving regulatory landscape. The pandemic created a more distributed workforce, which has forced employers to deal with leaves in many more geographies than they are used to and has added further compliance complexity. It also created a shift in mindset where employees looked to their employers to step up for them in pivotal moments like needing to take a leave. These moments may occur infrequently, but they are the ones that can make or break how an employee views their company. As such, leave benefits are becoming increasingly competitive and diverse as organizations look to attract and retain talent.

On the regulatory front, there has been a growing voice around the importance of paid family and medical leave, with an increasing number of states releasing their own paid leave programs (e.g. Massachusetts and Colorado) or constructing mandates around specific leave types, such as organ donation in California. There is a push at the federal level for paid leave as well through Biden’s American Families Plan. These initiatives create an ever-evolving matrix for employers to navigate, forcing them to stay on top of policies while trying to abide by new programs to correctly administer these benefits.

Cocoon was developed to address all of these issues, automating and simplifying leave with a platform that can be easily adapted at any time.

HR Technology News: Navigate and MercyOne Innovate to Improve Community Health

The New Way to Do Leave

Cocoon was founded by Mahima Chawla, Lauren Dai and Amber Feng — proven leaders who built their careers by reshaping the dusty, highly regulated industries of lending and payments through their work at Square and Stripe. Chawla, Dai and Feng came together to transform employee leave in a similar vein, creating a defining employee leave product and user experience.

“Tools exist to streamline nearly every business process, and yet before Cocoon, no one had stepped up to digitize employee leave,” said Bill Trenchard, partner at First Round. “When I met Mahima, Lauren and Amber, I knew they were the team to build something really impactful and novel here. Cocoon’s platform coupled with the founders’ vision and the strong team they’ve assembled puts the company on a trajectory to own a massive market and expand into new areas over time.”

The Cocoon platform removes all of the friction that exists today for both employees and employers through its proprietary technology, which serves every aspect of leave management from compliance to claims to payroll. Cocoon’s rules infrastructure ensures compliance with the multitude of state and federal leave laws as well as employer and insurance policies, and adapts to the ever-changing leave landscape. This allows employees to self serve in a product that always shows the right options based on what they are eligible for, and Cocoon automates the rest of the highly tedious manual processes away. The platform, which integrates with existing payroll and HR management systems, can be up and running according to a company’s specifications in a matter of minutes for employers and employees to start exploring and using the product.

“We are deeply committed to the wellbeing of our people at Carta, and Cocoon has allowed us to take this commitment to a new level,” said Suzy Walther, Chief People Officer at Carta. “Cocoon makes it exponentially easier for our HR team to support employees’ leave by helping us manage claims, compliance, compensation and more. With Cocoon, our team can focus on supporting employees during some of the most important times in their lives.”

Cocoon was built with employee privacy at its heart, especially given the sensitive nature of many leaves. Employees can educate themselves and design the entirety of their leave in private before sharing with their employer, a departure from how leave is typically handled today.

“Employees often need to take a leave at the most stressful or most personal moments of their lives. The last thing they want to worry about is filing paperwork or doing mental gymnastics to figure out how much they’re getting paid and by who,” said Chawla, co-founder and CEO of Cocoon. “After hearing countless nightmare stories about leave from employees as well as HR leaders, we didn’t want anyone else to have to endure this unnecessary stress. We built a software platform that puts the employee first and allows them to focus on the reason behind their leave– all the while removing headaches, costs and complexity for employers. Cocoon is a modern and empathetic solution to a longstanding pain point.”

HR Technology News: Business Use of Freelancers Accelerates Amidst the Pandemic, Finds Upwork Report

To share your insights with us, please write to

Cocoonemployee leaveEmployee Leave ExperienceHR TecchnologyIndex Venturesuser experience
Comments (0)
Add Comment