SME payroll platform Employment Hero triples valuation with $140 million raise

Cloud-based HR startup Employment Hero is on its way to becoming the next Aussie unicorn, after it secured a whopping $140 million in Series E funding.

The funding came from US-based Insight Partners, which is showing increasing interest in the tech scene down under. It also more than tripled the startup’s valuation, bringing it up from $250 million three months ago to a hefty $800 million today.

According to founder and chief Ben Thompson, that number’s only going up.

What is Employment Hero?

Founded in 2014 by Ben Thompson and Dave Tong, Employment Hero is a HR, payroll and employee benefit platform designed to help SMEs manage their workforce and boost productivity. The team claims the platform can reduce time spent on admin by up to 80%.

This raise follows a $45 million cash injection announced only months ago in March. Before that, the business secured $22 million back in 2019, at which time it was valued at more than $100 million.

Now, the business is seeing 113% year-on-year revenue growth. It provides services for more than 6,000 businesses, managing more than 250,000 employees.

According to a statement, Employment Hero processed $14 billion in gross wages over the past 12 months. It also increased its own headcount by about 65%, and now has 325 full-time employees.

Who are the investors?

All of the funding came from US-based Insight Partners — the same investor that poured a massive $223 million in Brisbane startup Octopus Deploy in April, and led SafetyCulture’s $99 million raise in May.

Previous investors into Employment Hero include hiring platform Seek, which led both the Series B and Series C rounds, as well as Aussie VCs AirTree Ventures and OneVentures, and Salesforce Ventures.

Why now?

The funding comes as Employment Hero looks to capitalise on the growth it has seen during the COVID-19 pandemic, as businesses of all sizes grapple with the continuing challenge of managing remote and hybrid workforces.

“Supporting SMEs through this transitional period and helping them elevate their mission, has fuelled our passion for growth,” Thompson said in a statement.

The pandemic has highlighted the positive effect tools like Employment Hero can have on a business, regardless of the market they’re in, he noted.

“Employers all around the world are faced with a myriad of challenges – not only are they striving to succeed in business, but many are navigating the complexities of employment law, people management and cultural growth,” he added.

“We’re committed to reaching more employers in the near future.”

What’s next?

Accordingly, this round of funding will see Employment Hero build out its team further and accelerate its “innovation timelines”, Thompson said.

It will also fuel further expansion into Southeast Asia and Western Europe, as well as building on its presence in New Zealand, Singapore, the UK and Malaysia.

And with a valuation of $800 million and more growth ahead, speculation abounds that Employment Hero could be the next Aussie unicorn — one of several emerging this year.

“We have been following Employment Hero’s journey for four years and have seen the impressive and consistent growth experienced by the company,” Insight Partners managing director Rachel Geller said in a statement.

“We are looking forward to supporting them through this next phase of their expansion journey.”