Dive Brief:
- Zenefits, an HR/benefits startup, announced on Wednesday that it raised $500 million in Series C funding in a round led by Fidelity and TPG.
- The new investment values Zenefits at a $4.5 billion valuation, hurdling the $1 billion mark to make it one of the top 20 most highly valued venture-backed tech startups in the world.
- It's Zenefits’ third funding round in less than a year and a half. The company raised $15 million in its Series A last January, then added $66 million in an June Series B round that valued it at more than $500 million.
Dive Insight:
Zenefits offers a cloud-based software-as-a-service HR platform for small businesses that tries to be an all-in-one solution for compliance, onboarding, payroll, health insurance and other employee benefits. The key is that the software is free to businesses; Zenefits makes its money as a broker of services, for example earning a fee from health insurers who register new businesses through Zenefits.
According to the Forbes article, CEO Parker Conrad wants to reach the 5 million small businesses in the U.S. with under 1,000 employees.
“It’s a lot easier to approach smaller companies,” says Conrad. “Try getting on the phone with a decision-maker at a 1,000-person company. It takes weeks if not months. We can close a lot more 100-person companies more easily.”
