Zenefits Raises $500M
The HR startup announced on Wednesday morning that it raised a blowout $500 million in Series C funding in a round led by Fidelity and TPG. The new investment values Zenefits at a $4.5 billion valuation, hurdling the $1 billion mark to make it one of the top 20 most highly valued venture-backed tech startups in the world. Zenefits raises $500M
The company raised $15 million in its Series A last January, then added $66 million in an June Series B round that valued it at more than $500 million. Zenefits raises $500M
Zenefits offers a cloud-based software-as-a-service human resources platform for small businesses that tries to be an all-in-one solution for compliance, onboarding, payroll, health insurance, and other employee benefits.
The key is that the software is free to businesses; Zenefits makes its money as a broker of services, for example earning a fee from health insurers who register new businesses through Zenefits. Zenefits raises $500M
He tells Forbes that he remains the largest individual shareholder of Zenefits, although declines to cite his exact ownership percentage.
The 34-year-old is now running a company with approximately 1,000 employees. Zenefits raises $500M
Conrad argues the money is well spent on upfront costs, including an explosion of new employees, especially in sales.
He hopes to make up that massive burn rate in the long run, as small business owners begin to rely on the service. Zenefits raises $500M
After reaching an annual recurring revenue figure of $1 million in January 2014, it grew by 20 times, reaching $20 million ARR a year later, and it expects $100 million by the beginning of 2016.
The company says it closed more new business this past March than it did in the first 15 months of the company’s life. Zenefits raises $500M
Conrad wants to reach the 5 million small businesses in the U.S. with fewer than 1,000 employees. Zenefits raises $500M
“It’s a lot easier to approach smaller companies,” says Conrad of this approach.
“Try getting on the phone with a decision-maker at a 1,000-person company. It takes weeks if not months. We can close a lot more 100-person companies more easily.”
(Credits to Brian Solomon)
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