Personio-a startup from Munich, Germany that styled itself as a Workday and ServiceNow focused on the world’s small and medium businesses-lost funding during the Covid-19 pandemic after it recruited, payroll, people management, development and training, workflow automation and other HR tools have gained traction specifically in organizations with remote or distributed teams: it raised nearly $ 400 million in one year to meet that need.
Now, with more businesses moving parts of their operations back to offices and hybrid environments, Personio is doubling. The company raised another $ 200 million to a new value of $ 8.5 billion, making it one of the most important startups in Europe to date.
The funding will be used to continue building its customer base – which now numbers 6,000 companies covering more than 500,000 employees – and enhancements to its platform, specifically with more automation tools to improve how companies operate. internal operations.
The funding is technically the second closure of its Series E, following the first tranche of $ 270 million that closed in October.
Personio was worth $ 6.3 billion at initial closing. Despite the price increase, Personio feels some of the valuation pressure that people are talking about and writing about, but it’s just that, CEO and co-founder Hanno Renner admitted.
“Since that increase in October, we’ve grown 2x, but our valuation has only increased 30%,” he said.
Greenoaks Capital Partners, which also led the first phase of Series E, also led this round, along with other unnamed investors who participated. (Previous backers also include Altimeter Capital, Alkeon, Index Ventures, Accel, Meritech, Lightspeed, Northzone and Global Founders Capital.)
Renner said this extra funding offer awaits in reserve in October; it chose to use it now because of the investment climate – you never know what might be around – and partly because it is keen to invest as it continues to see more growth opportunities.
Personio’s main premise is that its software is developed tailored to SMBs and how they are most likely to use the software, with options for self-service integration and no requirements to have dedicated staff to support it.
It made its name initially because of its rigorous offering of recruiting, onboarding and basic HR management tools.
But as SMBs have grown in their IT ambitions, so has Personio: the company has added third-party app integrations (now at 100) and last year the company began to expand its reach. automate workflow to help carry out task management, approval processes. , electronic signatures and other productivity tools.
That also led the company to make several acquisitions to expand that set, specifically acquiring another German startup called Back to improve and automate how teams manage ticketing and knowledge management. inside.
While Renner said the company is likely to continue adding more functionality to its platform, even as it is approached by larger businesses, it is unlikely to change its target customer size of 10 to 2,000 employees.
“We see that the needs of small and medium-sized companies are very different from businesses and the solutions they need are different,” Renner said. “It’s not just the money they’re willing to spend on IT, but people are investing around it. Business solutions require dedicated staff who do nothing but implement and run a tool. We’re already a few weeks away. without the additional resources needed to run it. These types of solutions are just very different. “
Company tools may have their own during a pandemic, when businesses that had previously conducted operations in person suddenly found themselves in need of more digital tools to keep businesses connected. people, but even if people are likely to go back to the physical office, it’s unlikely. that when HR functions become digital, they will also return to personal. And while there are dozens, perhaps hundreds, of competitors in this space-including companies like HiBob that also have ambitions to cover HR end-to-end, as well as many point-to-point solutions- Personio’s traction and general market trends have spelled out a major opportunity for investors.
“The Personio product has become an indispensable tool for small and medium-sized businesses in Europe as they recover from the challenges of the pandemic,” said Neil Mehta, founder and managing partner of Greenoaks Capital, in a statement. “As SMEs face the possibility of economic uncertainty in the future, Personio is a more critical platform than ever before, helping customers make their HR and payroll processes more efficient and stable while enjoying employees and employers. We believe Personio is among the best SaaS companies in the world, with rapid growth, a sustainable business model, and exceptional leadership. We are excited to once again partner Hanno and his team, and hope to continue our journey for many years to come.