Personio enters the payroll software business

Hannah Renner

The Personio boss is getting into the payroll accounting software with his company.

(Photo: Personio)

Berlin The personnel software developer Personio now also offers payroll accounting software. German business customers can now obtain systems for “the management of personnel data and payroll accounting from a single source,” company boss Hanno Renner told the Handelsblatt. The new wage and salary accounting system is fully integrated into the personnel data system and runs in real time.

“Instead of collecting changes such as new tax classes, bank details or information about new employees over a whole month and then forwarding them to an external system, data is validated immediately and changes are made,” says Renner. Personnel and salary data are synchronized and compared with each other, which can save time-consuming data transfers and manual checks and thus speed up the processes. This comes at exactly the right time, as more and more companies are trying to streamline their day-to-day operations and become more efficient, said Harry Nelis, partner at Personio investor Accel in London.

According to Personio, it has invested 40 million euros in the development of the innovation over the years. Renner has correspondingly high expectations of the new system: “Our existing customers currently spend significantly less money per employee on Personio than on payroll accounting. The potential is great.” Personio intends to take advantage of these opportunities in other European countries soon and is preparing to enter international business with monthly payslips. According to Personio calculations, 90 million people across Europe are employed by companies with between 10 and 2,000 employees. These would be paid monthly, resulting in more than a billion payslips a year, each costing between 10 and 12 euros.

IPO currently not planned

In the last round of financing in the summer of last year, the Munich start-up, which was founded in 2015, was valued at 8.5 billion dollars. Despite the significantly worse financing environment today, Personio continues to focus on high growth and is accepting losses as a result. “As long as we’re growing strongly, we can also invest,” says Renner, and: “we’re currently growing very strongly”. This continues the development of the past few years: In 2021, sales increased by 130 percent compared to the previous year, and Personio doubled them again in 2022.

According to Personio, it now has around 8,000 customers in Europe. With its HR software, the company focuses primarily on small and medium-sized companies with up to 2,000 employees. However, Personio is not alone on the market: Start-ups such as Payfit and Factorial also offer solutions for the digitization of HR work.

>> Read more here: When it comes to unicorns, profitability now counts instead of imagination

And what is the company planning for the future? “I make no secret of the fact that we will eventually go public,” says Renner. It probably won’t take five years. Only a few months ago, Personio changed its legal form from a GmbH to a European stock corporation (SE). The conversion is considered one of the first steps on the way to the capital market.

A stock market debut in the near future is not planned, says Renner. After all, it was “a financing event. However, we have many hundreds of millions in the account and could operate profitably if we wanted to.”

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