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in a startup In a world where down rounds are prevalent and raises much higher than a low-million Series A are practically (but not entirely) unheard of, those rare megabuck funding rounds are something altogether different. Little A little more today than a year ago.
With this in mind, Australia-based recruitment, HR and payroll platform, Employment Hero, today announced that it has secured AUD$263 million ($167 million) in a Series F round of funding. This makes the Sydney scaleup a fully signed-up member of the (USD) unicorn club, valuing the nine-year-old company at AUD$2.13 billion ($1.37 billion) – a 75 percent increase from its AUD$1.25 billion valuation last year ( $791 million) Series E round.
Employment Hero’s Series F round included participation from existing investors Insight Partners, Airtree, Seek and OneVentures.
‘Bigger than Atlassian’
Co-founder and CEO Ben Thompson said the company is aiming to become one of Australia’s largest technology exporters ever, with plans to expand on its current reach, which sees it partner with around 300,000 SMEs. It processes $85 billion in wages annually.
“We want to be known as an Australian business that has gone global, with ambitions to be the biggest startup ever to come out of Australia,” Thompson told TechCrunch in an interview.
Bigger than Atlassian, the $50 billion collaboration and productivity software giant?
“Bigger than Atlassian,” Thompson replied.
The company has raised a total of AUD$650 million ($411 million) since its inception, with its latest Series F tranche bringing in lead investor TCV, an American investment firm that has previously funded the likes of Meta, Spotify, Netflix and AirBnb. Companies have supported. , More specifically, the round was led by TCV’s London office, sending a strong signal about Employment Hero’s intentions for the new cash injection. Thompson said the company plans to double its ground team in the UK to 180 within the next year, and he expects it to be its biggest market within a few years.
“Although we are relatively unknown in the UK, we already have 20,000 SME customers and 200,000 employees there paid each month,” Thompson said.
all work
Ben Thompson (CEO) and Dave Tong (CPTO) Founders of Employment Hero Image Credit: employment hero
Founded in 2014 by Thompson and Chief Product and Technology Officer (CPTO) Dave Tong, Employment Hero in its original form was an integrated, cloud-based HR and payroll platform, complete with jobs board, timesheet management, and the associated bells and whistles. , perhaps along the lines of Highbob or Personio – companies that have touched fairly high valuations of billions of dollars in recent times. In the intervening years, Employment Hero has expanded into all kinds of tangible tooling, which it bills as a “full-autonomous solution for SMEs to recruit, pay and manage their workforce.”
The company has also made changes to Employer of Record (EOR) through Global Teams, which it launched in the middle of the pandemic to help companies manage their globally distributed workforce, such as across the board or remote. In fact, Employment Hero takes on the legal and administrative responsibilities for companies’ workforce, no matter where they are located.
Employment Hero’s main markets where its entire product range is available include Australia, New Zealand, Singapore, Malaysia and the UK, although its EOR product is available in 35 countries. As you might expect, Employment Hero also acts as an EOR for your own internal workforce. Employment Hero has grown from fewer than 200 employees before the pandemic to approximately 925 fully-remote workers today, spread across 19 markets.
“We went fully distributed, remote on February 13, 2020, when we had a COVID case in our office and we had to go home — and we never went back,” Thompson said. “And it’s been wonderful, we’ve embraced it.”
Employment Hero Dashboard Image CreditT: Employment Hero
swag factor
Employment Hero also has a “super app” in the form of Swag, which covers every aspect of a person’s financial life – in and out of work. This includes built-in digital wallet, debit card, cashback offers, online discounts and more. Many of these features can be used independently of the core Employment Hero platform, meaning any consumer can open a Swag account. This includes people who are actively looking for work, with the recently launched SmartMatch feature that matches job seekers’ profiles with jobs listed on the Employment Hero platform.
“We’re creating micro talent pools so any employer on our platform can log in and see that they have a queue of people who are interested in working for them, and specific roles they’re interested in filling ,” Thompson said. “So if someone resigns tomorrow, he already has the talent pool. If they need to copy a role tomorrow because they are growing fast, they already have a talent pool. This completely changes the way businesses recruit in the future.
swag card Image Credit: employment hero
And where a company is also an Employment Hero customer, employees can use Swag for a wide range of uses, including accessing timesheets, managing leave requests, and reading company alerts.
“What we realized was that ’employment’ is more than just being employed in a job,” Thompson said. “It’s how people find work, manage work, how they get paid, and how they spend and save. That means we want to make sure every employee has a ‘super app’ that not only helps them find work better, not only helps them manage work better, but also helps them Get payment also.
swag app Image Credit: employment hero
Like almost every other company, Employment Hero is also fully adopting generative AI. Just this week, the company launched “Hero AI” to answer some of the questions employees most commonly ask, or even thank team members with Hero AI for taking care of the specifics of the message. Gave.
Hero AI relies on OpenAI’s GPT large language model (LLM) (though not integrated with ChatGPT) and extracts information from customers’ own data sources, such as company policy documents,
Hero AI Image Credit: employment hero
unsung (working) hero
Earlier this year, Ripple, one of Employment Hero’s rivals, raised $500 million at a whopping $11.25 billion valuation, even though it was part of a quick response to the Silicon Valley Bank (SVB) debacle. This, combined with other recent bigs like HiBob, which announced an additional $150 million in funding just last month, points to a thriving sector.
But Thompson suggests that Employment Hero is not getting the recognition it deserves.
“We feel like we’ve been somewhat of an Australian underdog…you read about Rippling and Highbob and these companies, and it’s like our coming of age,” Thompson said. “We want to be known for being global and being the biggest, but we haven’t been recognized as such yet.”
However, one cannot escape the similarities between Rippling and the Employment Hero. The former is pursuing more and more segments of the corporate payments stack, from spend management to global payroll and beyond. Notably, it also recently launched in the UK, a move that may have spurred Employment Hero into action. However, Thompson insists his latest news has nothing to do with that.
“Absolutely not – quickly realizing our mission of making employment easier and more valuable for everyone is what drives our actions,” Thompson said.
Additionally, Thompson points to swag as a major way Employment Hero seeks to differentiate itself from the pack.
“The combination of a consumer app with an employer platform is unique, and it puts us in a really compelling position to help employees as much as we help employers — and no one else is doing it,” Thompson said. “
A quick look at other industries reveals other success stories in an otherwise dry funding landscape. London-based Quantexa, which provides AI smarts to help banks thwart fraud, doubled its valuation to achieve unicorn status after a $129 million funding round in April. Elsewhere, A16z-backed chatbot startup Character.AI closed a $150 million Series A round at a valuation of $1 billion, just two months before launch. And then there’s Boston’s Gradiant, which hit the magical $1 billion valuation mark for its AI-enabled wastewater management platform.
But these are generally outliers. Today the term “unicorn” – in the context of company valuation, at least – is now more closely associated with what it was initially meant to describe: something rare. Data indicates that the number of unicorns declined by 89% in the first quarter of 2023 from the peak of 2021, in which 163 new unicorns were born. Everyone In the last two quarters of that year alone.
The fact is, while employment is something that affects almost everyone on earth, SMEs – Employment Hero’s core market – contribute significantly to the global economy. International Labor Organization (ILO) data shows that SMEs contribute more than 50% of GDP in most OECD countries, with this figure rising to 70% in some markets. And that’s why Employment Hero, Rippling, HighBob and their ilk continue to raise big money at big valuations – it’s much more than just “HR”, a term that lumps these types of platforms together.
“We don’t look at it as HR, we look at it as employment – it’s about finding work, managing the work you’ve got, managing time and how you get paid for it, how you negotiate. Have a process for it with your employer, and make sure you can spend every dollar you earn in the smartest way and with the most purchasing power,” Thompson said.
Looking to the future, Employment Hero also has big aspirations, with Thompson looking to improve the way people are paid. Today, companies on Employment Hero can offer workers InstaPay, which basically enables early access to money they’ve already earned – so instead of waiting until payday at the end of the month, employees can access their earned money. Can request up to half of the wages. Advance for a small fee. However, Thompson is eyeing a transition to real-time pay, meaning that the established criteria of being ‘paid in arrears’ (ie working two weeks or a month before getting paid) will be changed to something more real-time. And this is where he sees Swag changing the game.
“Daily pay is coming — it’s not there yet, but we want to give people the option of daily pay with it,” Thompson said. “Now, this completely changes the way people connect work and money – our goal is to combine the flexibility of gig work with the quality of employment. Swag is going to change the global financial system.
