A cloud-based human resources and labor management software startup called SmartHR announced on Monday that it had raised $140 million in funding. The round was led by KKR and included current backers as well as Teachers’ Ventures Growth, an investment arm of the Ontario Teachers’ Pension Plan.
Three years ago, the company raised a $142.5 million (15.6 billion JPY) Series D round, which gave it a value of $1.6 billion. The Series E round is the latest sign that investors are still interested in tech that helps businesses better handle their biggest cost–staff.
The Company Wouldn’t Say Anything About Its Present Value
The company SmartHR was started by Kensuke Naito and Shoji Miyata in 2015. In the past two years, there has been a lot of demand for its SaaS platform, which helps businesses handle and organize their processes and human resources: A company representative told TechCrunch that as of February 2024, its yearly recurring revenue (ARR) had hit $100 million. This is a big jump from FY 2023’s total revenue of $80 million.
Other parts of the world have also seen strong demand for HR tech, which fits with this growth. The Information says that in 2023, Rippling, an American company that SmartHR says is most like it in terms of goods and strategy, saw its ARR double to $350 million. TechCrunch was told that Gusto, a company that makes software and provides services for managing payroll, had made more than $500 million by April 2023. In March, Deel, a company that handles payroll for businesses across borders, also said that it had made more than $500 million.
The market also has a huge amount of startup capital, which Fortune Business Insights says will be worth an amazing $81.84 billion by 2032. It is one of the biggest startups in its field, and Crunchbase says it has raised about $2 billion. The company said it was worth $13.5 billion after getting $200 million in funding in April. Some sources say that Gusto has raised almost $750 million, and others say that it is worth about $9.6 billion. And Crunchbase says that Deel, which is worth $12 billion, has raised a total of $679 million.
Also, investors are putting money into smaller companies that are tackling almost every part of standard HR: Remofirst recently raised $25 million to help its customers hire people around the world without having to set up local offices. Palm, which wants to improve the HR tech experience in MENA by putting mobile first, raised $5 million last year. Compa got $10 million in January to build its platform that gives recruiters aggregated compensation data so they can be more competitive when hiring, and Legion raised $50 million last month to automate hourly staff management for companies.
Japan’s Works Human Intelligence, freee, and Moneyforward are some of SmartHR’s competitors in the back office software market. A representative for the business said that it stands out because it “obtains the latest and most accurate employee data through labor management, which positions it as a system of record in HR.” This spokesperson also said that the company can quickly launch new products by using this employee data.
The new business said it would use the extra money to hire people, come up with new products, and grow through both natural and artificial means, like mergers and acquisitions. It has about 1,000 workers right now.
Also Read: As Japan’s Population Falls, the Government Approves a New Scheme to Bring in More Workers
Light Street Capital, Sequoia Capital Global Equities, and Whale Rock are some of the investors that have backed it in the past.
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