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How (and where) they work has changed dramatically in 2020, and organizations have begun to rethink how well they manage their employees and what tools they use to do so. On January 18th, one of the startups building technology to solve these challenges announced a major funding round that highlights its traction.
German startup Personio is an all-in-one for small and medium-sized businesses (10-2000 employees) that covers recruitment, employee education and training, payroll, attendance management and other key human resources functions. We are developing an HR platform. The company has raised $ 125 million in post-money valuations of $ 1.7 billion.
The Series D round will be jointly led by Index Ventures and Meritech, with existing investors Accel, Lightspeed Venture Partners, Northzone, Global Founders Capital and Picus participating.
The $ 1.7 billion valuation is a huge leap from $ 500 million a year ago. The company doubled its sales the previous year and wasn’t thinking about raising new money as the money it raised last time was still in its bank account.
Personio currently has 3,000 small business customers in Europe.
In an interview, co-founder and CEO Hanno Renner said he would continue to use the money raised to build the product. The company’s products are a bit like Workday, but for smaller organizations. Personio will also spend money to expand its business in Europe.
Small businesses may be a difficult sector to deal with, but Renner said new opportunities have emerged. People in the small business sector with new thinking have begun to recognize the value of having a modern and integrated HR platform.
“We launched Personio in 2016 to be the most advanced HR platform for mid-market companies. We knew it would be a great company, but we know what HR really means. I realize it can be difficult, “he said. “But I think what has driven our business so far has been the realization that HR is not just an important part, but the most important part of any business.”
Providing tools (as an example) for hiring, signing contracts, and remotely educating and nurturing new employees can be magical to change users, he said. Still, he realizes that many of the midmarket, especially non-tech companies, are still working on Excel spreadsheets, and even more surprisingly, “years behind” with pen and paper. doing. “Our business has grown by supporting the digitization of such companies in a more efficient way.”
Personio isn’t the only startup that wants changes in how it works to lead to new purchases of HR tools. Startups like Hibob are also growing their businesses significantly, raising money to take more aggressive opportunities.
Hibob is building more training tools, a feature-developing race that Personio must keep up with.
However, there are quite a few SMEs in the European market, with over 25 million companies, accounting for 99% of all companies according to an EU survey. The fact that many of these SMEs haven’t implemented any HR platforms yet leaves room for many players to grow significantly in this area.
“SMEs support the European economy by hiring 100 million people across Europe, but it’s also a sector that has been ignored by software companies that were primarily focused on large companies,” said Index, a director of Personio. Partner Martin Mignot said in a statement. “Personio will change that by creating powerful tailor-made tools that solve the needs of small businesses.”
“We had the pleasure of working with some of the most successful SaaS companies in the world. Given the success of Personio over the last five years and the huge potential of the market, we have a successful and influential business for Personio. I firmly believe in the ability to build, “added in a statement, Alex Clayton, general partner of Meritec Capital. “We’ve had a lot of great discussions with (CEO) Hano (Lenner) over the last few years and we’re excited to join Personio’s journey now.” Clayton will also join Personio’s board members as part of a funding round.
Related article: Hibob, a human resources platform development company, raises about 7.3 billion yen for new initiatives for HR
Rachel Maga is a technology journalist currently working at Globe Live Media agency. She has been in the Technology Journalism field for over 5 years now. Her life’s biggest milestone is the inside tour of Tesla Industries, which was gifted to her by the legend Elon Musk himself.