Munich It was only in January that the personnel software start-up Personio managed to become a unicorn valued in billions. Founder Hanno Renner has now reached the next milestone: In a new financing round, the Munich-based company raised another 270 million dollars and, with a valuation of more than six billion dollars, became the second most valuable German start-up behind the front-runner Celonis.
Personio has not yet issued the capital from the financing round at the beginning of the year. “But we now have the security of being able to calmly implement our business strategy by 2023 without distraction,” Renner told Handelsblatt.
He also announced an expansion of the business model. Personio also wants to automate processes such as sick leave and settings beyond the HR department in the future.
Personio has raised more than half a billion dollars since it was founded six years ago. The financing situation is currently very good for promising start-ups because there is a lot of money in the market.
Celonis raised a billion dollars in the middle of the year. The process mining specialist was the first German start-up to have a valuation of more than ten billion dollars and now bears the title of a decacorn.
A kind of SAP for HR managers in medium-sized companies
Personio has developed standard software for personnel management in small and medium-sized companies. The aim is to become a kind of SAP for HR managers in companies with up to 2000 employees. Personio sees 1.7 million companies in Europe as potential customers.
“In the current year we have accelerated growth by another 30 percent,” says Renner. In 2020, according to industry estimates, revenues had roughly doubled to a mid double-digit million amount.
So this year growth could be around 130 percent. Personio then wants to break the 100 million euro mark in 2022. “With our stock of 5,000 customers, we serve just 0.3 percent of the potential market,” says Renner. “There is no reason why we shouldn’t increase the proceeds tenfold again.”
There are competitors such as HRworks. But the market offers all providers great opportunities because many medium-sized companies do not yet have any software solutions and work with Excel tables, for example. “Personio brought a certain amount of hype into the market segment. This shows how attractive the industry is, ”says Markus Schunk, CEO of HRworks.
Investors see it similarly and are therefore queuing up to join the market leader Personio. The Series E round has now been led by Greenoaks Capital Partners.
Additional capital comes from Altimeter Capital and Alkeon Capital. Previous donors such as Index Ventures, Accel, Meritech, Lightspeed, Northzone and Global Founders Capital also took part in the financing round.
Greenoaks founder Neil Mehta says small and medium-sized businesses have been neglected by established providers for too long. “Personio democratizes technology that was previously reserved for large companies.”
Top ten in Europe
In January Personio was valued at $ 1.7 billion, now it was $ 6.3 billion. This should make the company one of the top ten in Europe. According to Renner, the high rating is particularly helpful when it comes to perception by young talents.
Other software modules can also be docked to the Personio operating systems. At its core, it is about cloud-based solutions, for example for applicant management and vacation planning.
Customers also include other start-ups. “If we look at the HR processes in – especially fast-growing – start-ups today, Personio has become indispensable,” says Carsten Rudolph, Managing Director of the BayStartup investor network. Efficiency, especially in recruiting, is extremely important for them.
After the new financing round, Personio wants to significantly expand the functionality with the new software category “People Workflow Automation”. It should enable smaller companies to automate processes that were previously carried out manually, such as promotions, terminations or sick leave, and to keep an eye on status and delays via a workflow hub.
For example, if an employee calls in sick via the app, their appointments can be deleted in the digital calendar and the supervisor informed. If there is the green light for employment after an application, a draft contract is automatically created and sent to the person responsible for the digital signature.
“Projects that previously consisted of various manual tasks across departmental boundaries can be easily managed by HR teams,” says Personio. Solutions such as Slack and MS Teams will be integrated into the new software platform.
Personio is increasing management ranks itself
In the past year and a half, Personio had also increased its management team: Ross Seychell moved from Transferwise to Personio as the new “Chief People Officer”. The ex-Dropbox European boss Geraldine MacCarthy joined as “Chief Revenue Officer”. And Birgit Haderer, previously at Zalando, took over the position of CFO.
Renner founded the company in 2015 together with Roman Schumacher, Ignaz Forstmeier and Arseniy Vershinin. The start-up emerged from a program of the Center for Digital Technology and Management (CDTM) at the Technical University of Munich. The sporty manager – this summer he rode his mountain bike across the Alps, now he’s looking forward to the ski touring season – hopes to be able to preserve the character of the start-up despite the ever increasing dimensions.
The company now has 1,000 employees. But try to keep the hierarchies flat. “New colleagues say it still feels a lot like a start-up,” says Renner.
Personio has its sights set on a possible IPO in the medium term. “But that won’t happen before 2023, and even then it’s only an option,” said Renner. The new investors are very long-term oriented and have no pressure for a quick exit.
Doesn’t he sometimes get dizzy given the high rating? The company has shown a lot of stability so far and has always met or exceeded the forecasts. “The new rating does not put us under pressure.”
More: Celonis becomes the first German decacorn