San Francisco, Calif. (May 6, 2015) – In order to meet strong demand from small- and medium-sized businesses across the country, Zenefits announced today that it has raised a $500 million Series C round of funding at a post-money valuation of $4.5 billion. Zenefits is a free, cloud HR automation platform that makes it effortless to manage a business and its employees by automating all of the associated HR administrative work: compliance, on-boarding, payroll updates, health insurance, and other employee benefits. This funding round comes just two years after Zenefits’ launch.
In that time, Zenefits has signed up more than 10,000 small-and medium-sized businesses in 48 states across nearly every industry including education, tech, health care, non-profits, financial services, and professional services. The new round of funding will enable Zenefits to build up its sales and marketing teams to help the company reach the approximately 5 million American businesses with between 2 and 1,000 employees and to scale its account staff so that it can support these new customers.
“There are millions of small businesses in the country that have been wasting countless hours every year juggling multiple HR systems and outdated technology. We are not just eliminating the paperwork; we are eliminating the actual work – making it easier for small businesses to manage and grow,” said Parker Conrad, co-founder and CEO of Zenefits “We are thrilled that investors share our vision for the company and for what Zenefits can bring to the marketplace.”
The funding round was led by Fidelity Management and Research Company and TPG. Among other investors participating are Insight Venture Partners, Founders Fund, Khosla Ventures, and Ashton Kutcher’s and Guy Oseary’s Sound Ventures. In addition, previous investors Andreessen Horowitz, Institutional Venture Partners (IVP), and Jared Leto added to their stakes in the company. With Andreessen Horowitz’s investment in the Series C round, Zenefits now represents that firm’s largest investment to date.
“Zenefits is a transformative company that will change the industry and is an exciting investment for TPG Growth. We continue to look for great companies where we can use our global scale and platform, and we are very excited about the opportunity to help Parker and his team seize this enormous opportunity,” said Bill McGlashan, Managing Partner of TPG Growth.
“In my experience, the momentum that Zenefits has achieved in two years is unprecedented. Zenefits has brought the benefits of software to a massive industry that had yet to embrace technology at scale,” said Lars Dalgaard, General Partner at Andreessen Horowitz. “And their potential market includes tens of millions of employees, using multitudes of different business applications in companies of all sizes. We’re thrilled to have led the A and B rounds and to have doubled down again in the C round. They are Andreessen Horowitz’s biggest investment to date.”
The free Zenefits software lets employers manage their payroll, health insurance, on-boarding, benefits, and more — all from a single, beautifully-designed dashboard. Employers can connect to their existing benefit providers or add new ones as needed, automating 95 percent of administration work so that tasks which used to take weeks can now be done in minutes.
“Zenefits transforms the way we manage our employee on-boarding and benefits, turning a clunky benefits process for 130 employees into a smooth, automatic experience,” said Michael Green, business administrator for The Animal Foundation, a Las Vegas animal shelter. “Zenefits saves me at least four hours of work a week. Now I can spend my time focusing on the important parts of my job — helping to run a non-profit.”
The Series C funding will allow Zenefits to continue rolling out new products and features to meet the needs of small businesses across the country. Over the past year, Zenefits has launched new features such as stock options administration and instant background checks on prospective employees.
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