Personio, a German startup that helps a small army of small businesses across Europe handle common HR tasks such as onboarding and payroll, has raised a series round of $ 270 million to a valuation of $ 6.3 billion. The value of the Munich-based startup has exploded since January, when it raised $ 125 million at a valuation of $ 1.7 billion and comes amid a boom in investment in European startups.
The startup is currently helping the human resources departments of around 5,000 small European companies that would be too small to work with US HR software giants such as Workday, ServiceNow or APD, keep track of recruitment and staff. Personio co-founder and CEO Hanno Renner says the new funding would burn a push to automate other routine HR tasks like opening and closing access to platforms like Slack or Salesforce for new hires or when staff move teams.
“We digitize essentially the entire employee life cycle from recruitment to onboarding, employee development, payroll … and when different people in a company want to interact with HR to request an absence or payslip,” says Renner. “What we do with people’s workflow automation is to overload this platform by adding a layer on top that connects to many other tools and automates these processes across these different tools.”
The growth in startups, which was reported to have 3,000 small and medium-sized businesses on the books in January and now generating “high double-digit millions” of annual recurring revenue, according to Renner, could explain the jump in startup valuation.
Personio’s push for workplace automation, which could merge and streamline the dozens of apps like Slack, Salesforce and Microsoft Teams that small businesses have adopted during the pandemic, was probably also a draw for investors. One of the leaders in this field of automation in the workplace Romania’s UiPath, which uses bots to automate thoughtless bookkeeping and accounting tasks, listed on the New York Stock Exchange in April in one of the largest technological IPOs ever with a market capitalization of 28 billion dollars.
The most recent round for Personio was led by Greenoaks along with Altimeter Capital and hedge fund Alkeon in New York. The Munich-based startup had already raised about $ 230 million dollars from a storied lineup of former backers, including Accel, Lightspeed Venture Partners, Index Ventures and Northzone.
‘Although small businesses are the backbone of the European economy, they have been too low and overlooked by old players for too long. Personio democratizes the company’s opportunities and delivers a step-by-step change in productivity, ”says Neil Mehta, founder and CEO of Greenoaks.
Venture investors plowed $ 54.4 billion into European startups in the first half of 2021 amid a boom for startups in hubs like London, Berlin and Paris that exceeded the $ 52.1 billion invested in 2020, according to data from Pitchbook. This investment boom has helped close the valuation gap between European startups and US and Asian rivals, but has also seen the value of VC favorites like Sweden’s buy now pay later startup Klarna quadrupled, and London-based fintech Revolut jumps six times in less than one year .
Renner says a stock exchange listing or a direct listing was on the horizon, but was probably two to three years away. “I plan to focus on building Personio for many, many, many years to come, and that comes with a public listing, of course, but that’s not something we want to do next year because we’ve well capitalized now,” Renner said.
Renner, a Forbes 30 Under 30 alum, founded the company with three partners in 2014 after a friend who worked as a CTO in a small business contacted for help managing payroll and recruitment systems running from Microsoft Excel spreadsheets. “You asked me about our main competitor, and it really is still Microsoft Excel, [which is] where most companies collect most of their personal data and try to manage them there, ”he says.