James Lafa from Back, Hanno Renner from Personio and Christian Eggert from Back want to integrate their software even more closely in the future.
(Photo: Janina Laszlo)
Munich Personio, one of the highest rated start-ups in Germany, dares its second acquisition. The personnel software specialist takes over the Berlin software start-up Back Technologies. “Many of our customers use both products, we can now integrate Back’s software even more deeply,” said Personio founder Hanno Renner to Handelsblatt.
Back Technologies automates HR processes and brings together channels such as email, WhatsApp and Slack. With the technology, for example, classic employee inquiries via Slack or teams on salary issues can be answered automatically with the help of artificial intelligence or forwarded to the right place. Back has “a tremendous amount of experience developing workflows that bring together fragmented tasks,” says Renner.
Personio is one of the German unicorns with a billion dollar valuation. In the last round of financing in the fall, the company raised another $270 million. With a valuation of more than six billion dollars, Personio was at times the second highest valued German start-up.
Personio has thus once again obtained fresh capital at a good time – which has actually not yet been used. In the meantime, the global turmoil has led investors to take a closer look at large financing rounds. Trade Republic, N26 and Gorillas are said to have struggled with fundraising. Fear of “flat rounds” or even “down rounds” is already rife in start-up circles. This refers to rounds of financing in which the company valuation no longer increases or even decreases.
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“We are happy to be very well capitalized in the current environment,” said Renner. He is rather relaxed about the currently lower ratings for start-ups. Because Personio has a functioning, resilient business model. Such companies would always find investors. “Our business model works even in a global recession,” says Renner.
Grow, grow, grow
According to industry estimates, Personio’s sales more than doubled last year to a mid double-digit million amount. “We believe that we can maintain the three-digit growth rates for a long time,” said Renner. Only 0.35 percent of the potential market in Europe has been developed and the functionalities are being expanded.
The Berlin start-up Back has been working with Personio for several years. The IT tools could be connected to the Personio software. “We are therefore very pleased to be driving people workflow automation forward together with the market leader,” said Back co-founder Christian Eggert.
The CEO was a former manager at Rocket Internet holdings Zalando and Westwing before founding his first company: Minodes, a provider of digital analytics tools for retail. He later sold the company to the Spanish telecommunications group Telefónica.
Eggert then founded the food delivery service Bonativo. The company never quite lived up to expectations and was acquired by French competitor Foodassembly in 2016. Back Technologies is now Eggert’s third self-founded company.
Personio has developed standard software for personnel administration 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.
The chemistry must be right
For Personio, the takeover is also an opportunity to recruit qualified personnel. “It was important to us that the entire team, including the founders, stayed on board,” said Renner. He also announced the opening of a new office in Berlin. Initially, 20 employees who were previously in the home office will work here. There is also a new location in Barcelona. Personio hopes this will give them access to additional tech talent.
For Personio, it was the second takeover after purchasing the Spanish payroll specialist Rollbox three years ago. The purchase price for Back is in the low double-digit millions. Renner can imagine further acquisitions. “But we are very selective when it comes to acquisitions,” he says. “It has to go very well with what we’ve been doing up to now.” The chemistry also has to be right culturally.
More: The valuations for German start-ups could fall