Zenefits, a San Francisco based HR startup is now valued at a cool US$ 4.5 Billion, making their growth and rise astounding by any standards. Just around two years old, this SAAS based company raised another massive round of funds that went to the tune of US$ 500 Million, creating a huge shock in silicon valley.
Zenefits offers free software-as-a-service (SaaS) for human resources functions for small businesses. The platform provides an all in one solution for heath insurance, employee benefits, payroll, onboarding and even vacation tracking.
The reason they are able to enter the market so quickly is that it’s targeting businesses with fewer than 1,000 employees and makes it fully free for them. The company actually makes its money on broker fees when users of the software choose to buy insurance and other Human Resources and benefit services from its platform.
Zenefits had raised $15 million in its first round last January, that Series A funding gave them a start and put them on the map, then shortly thereafter in June they raised their Series B which added US$66 million at a now modest US$ 500 million. Now, in their Series C round that raised this half a billion dollars, their total capital raised over three rounds has become US$582 million.
I mean, you keep hearing crazy valuations for young technology startups in silicon valley, but Zenefits is at a whole new level. Its trajectory has been sitting on a rocket ship and isn’t looking to slow down at any time soon. It is clear that the investors are loving them and agreeing with their approach, so as to help raise such an eye popping round for this young company. Named the hottest startup in 2014, it seems like they are sure to bag the award in 2015 too.
It is now confirmed that Andreessen Horowitz, the most respected venture capital firm has made additional contribution to this round as well and that too the single largest investment ever by this VC firm. The numbers from this deal are staggering and believe this, Zenefits, now US$ 4.5 Billion valuated company is one of the top 20 most highly valued and venture backed tech companies in the world. Pretty amazing, to say the least!
In addition to Andreessen Horowitz, this third round was also led by Fidelity and TPG. Khosla Ventures, Insight Venture Partners, Founders Fund, Jared Leto, and Ashton Kutcher, Institutional Venture Partners (IVP) and Guy Oseary’s Sound Ventures all contributing to it. It also made CEO and Co-Founder Parker Conrad a potential billionaire as he is and remains the largest individual shareholder of Zenefits, although no one really knows his percentage share, the 34 year old is excited about taking his 1,000 employee company to next level.
CEO, Parker Conrad is all smiles after the US$500 Million Funding Round
Just a few months ago, Zenefits was serving more than 2,000 small businesses around December and now has more than 10,000 clients looking to grow revenues to US$ 100 million quickly by January 2016, a huge jump considering they had reached US$ 1 million in annual recurring revenue in January 2014.
We closed as much business in March 2015 as we did entire the previous 15 months of the company’s history. CEO and Co-Founder, Parker Conrad
This changes everything for Zenefits, its exciting yet the target mark has been put on them. Silicon Valley is watching, the world is watching. It is theirs to lose. We’ll have to wait and watch how things unfold.
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