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German Startup Personio's Valuation Soars To $6.3 Billion - Forbes

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Date: 2021-10-11 22:29:56

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Hanno Renner, CEO and cofounder of Personio, has raised a $270 million Series E round at a $6.3 billion valuation for the Munich-based HR tech startup

Personio

Personio, a German startup that helps a small army of small businesses across Europe manage common HR tasks like onboarding and payroll, has raised a $270 million series round at a $6.3 billion valuation. The value of the Munich-based startup has exploded since January when it raised $125 million at a $1.7 billion valuation and comes amid a boom in investment into European startups. 

The startup currently helps the human resources departments of around 5,000 small European businesses that would be too small to work with American HR software giants like Workday, ServiceNow, or APD, stay on top of recruitment and staffing. Personio co-founder and CEO Hanno Renner says the new funding would fuel a push into automating other routine HR tasks like opening and shutting down access to platforms like Slack, or Salesforce, for new hires, or when staff move teams. 

“We are essentially digitizing the entire employee lifecycle from recruitment to onboarding, employee development, payroll...and when different people in a business will interact with HR to request an absence or a payslip,” says Renner. “What we are doing with people workflow automation is supercharging this platform by adding a layer on top that connects too many other tools and automates these processes across these different tools.”

The growth of the startup, which was reported to have 3,000 small and medium-sized businesses on its books in January and now generates “high double digits of millions” of annual recurring revenue, according to Renner, could explain the jump in the valuation of the firm. 

Personio’s push into workplace automation, which could weave together and streamline dozens of apps like Slack, Salesforce, and Microsoft Teams that small firms have adopted during the pandemic, was also likely a draw for investors. One of the leaders in this field of workplace automation, Romania’s UiPath, which uses bots to automate mindless bookkeeping and accounting tasks, listed on the New York Stock Exchange in April in one of the biggest ever tech IPOs with a $28 billion stock market value. 

The latest round for Personio was led by Greenoaks along with Altimeter Capital, and New York-based hedge fund Alkeon. The Munich-based startup had already raised around $230 million from a storied lined up of earlier backers who include Accel, Lightspeed Venture Partners, Index Ventures, and Northzone.

“While small businesses are the backbone of the European economy, they have been underserved and overlooked by legacy players for too long. Personio democratizes enterprise capabilities and delivers a step change in productivity,” said Neil Mehta, founder and managing partner 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, eclipsing the $52.1 billion that was invested across 2020, according to data from Pitchbook. That investment boom has helped close the valuation gap between European startups and American and Asian rivals but has also seen the value of VC-favorites like Sweden’s buy now pay later startup Klarna quadruple, and London-based fintech Revolut leap sixfold in less than a year.  

Renner says that an IPO, or a direct listing, is on the horizon but is likely two to three years away. “I plan to focus on building Personio for many, many, more years in the future, and that of course will come with a public listing however that’s not something we will be doing next year because we are now well capitalized,” says Renner. 

Renner, a Forbes 30 Under 30 alum, founded the business with three partners in 2014 after a friend, who was working as a CTO at a small business, reached out for help to manage payroll and recruiting systems that were running off Microsoft Excel spreadsheets. “You’ve asked me about our main competitor and it is really still Microsoft Excel, [which is] where most companies are collecting most of their people data and trying to manage them there,” he says. 

Original Source: https://www.forbes.com/sites/iainmartin/2021/10/11/german-startup-personios-valuation-soars-to-63-billion/