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Personio raises $125M on a $1.7B valuation for an HR platform targeting SMEs

With the final yr altering how (and the place) many people work, organizations have began to rethink how nicely they handle their staff, and what instruments they use to do this. Today, one of many startups that’s constructing know-how to handle this problem is asserting a significant spherical of funding that underscores its traction up to now.

Personio — the German startup that targets small and medium-sized companies (10-2,000 staff) with an all-in-one HR platform overlaying recruiting and onboarding, payroll, absence monitoring and different main HR features — has picked up $125 million in funding at a $1.7 billion post-money valuation.

The Series D is being co-led by Index Ventures and Meritech, with earlier backers Accel, Lightspeed Venture Partners, Northzone, Global Founders Capital and Picus all collaborating.

The $1.7 billion valuation is an enormous bounce on the corporate’s $500 million valuation a yr in the past, and it comes after a yr the place the startup has doubled its revenues, and was not on the hunt to lift, with a lot of its earlier fundraising nonetheless within the financial institution.

Personio at the moment counts some 3,000 SMEs in Europe as prospects.

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In an interview, Hanno Renner, the co-founder and CEO of Personio, mentioned that the startup can be utilizing the funding to proceed constructing out the product — which operates a bit like Workday, however constructed for a lot smaller organizations — in addition to increasing its presence in Europe.

Although SMEs generally is a notoriously difficult buyer phase, Renner mentioned {that a} new alternative has emerged: a brand new wave of individuals within the SME sector have began to understand the worth of getting a contemporary and built-in HR platform.

“We began Personio in 2016 eager to change into the main HR platform for mid-market corporations, and we knew it could possibly be an incredible firm, however we notice it may be arduous to know what HR actually means,” he mentioned. “But I feel what has pushed our enterprise up to now yr has been the belief that HR isn’t just an necessary half, however possibly crucial half, of any enterprise.”

It might take one magic flip to transform customers, he mentioned, by offering (as one instance) instruments to recruit, signal contracts and onboard new staff remotely. Still, he acknowledges that the mid-market — particularly these corporations not constructed round know-how — has been “lagging for years,” with many nonetheless working off Excel spreadsheets, or much more surprisingly, pen and paper. “Supporting them by serving to them to digitize in a extra environment friendly method has been driving our enterprise.”

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Personio isn’t the one startup hopeful that the shift in how we work will deliver a brand new appreciation (and urge for food) for buying HR instruments. Others like Hibob have additionally seen an enormous increase of their enterprise, and have additionally been elevating cash to faucet into the chance extra aggressively.

Hibob is seeking to construct in additional coaching instruments, underscoring the characteristic race that Personio can even must run to maintain up.

But given the sheer numbers of SMBs within the European market — greater than 25 million, and accounting for greater than 99% of all enterprises, in accordance with analysis from the European Union — the truth that lots of them have but to undertake any type of HR platform in any respect, there stays a whole lot of progress for numerous gamers.

“SMEs are the spine of the European economic system, using 100 million individuals throughout the continent, however it’s also a sector that has been uncared for by software program corporations centered predominantly on massive enterprises,” Martin Mingot, a accomplice at Index who sits on Personio’s board, mentioned in an announcement. “Personio adjustments that, having created a set of highly effective instruments tailor-made to handle the wants of small companies.”

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“We have had the pleasure of working with a number of the most profitable SaaS corporations on the planet, and given Personio’s success over the previous 5 years and the immense market potential, we strongly imagine in Personio’s capacity to construct an equally profitable and impactful enterprise,” added Alex Clayton, common accomplice at Meritech Capital, in his personal assertion. “After many nice discussions with Hanno over current years, we are actually excited to be becoming a member of the journey.” Clayton can be becoming a member of the board with this spherical.

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