German HR Startup Wins $200 Million
As many startups struggle to raise extra cash or cut back on spending, some investors are looking to double down on previous bets. San Francisco-based venture capital fund Greenoaks Capital has led a new $200 million round for HR startup Personio that values the company at $8.5 billion.
The unusual precautionary investment extends to $270 million from Series E round Personio, which builds human resource software for small European businesses, raised in October. The deal also suggests that the multipliers for fast-growing startups like Munich-based Persono, which have doubled revenue since its last round, have slipped along with public markets. Other European unicorns like Klarna are reportedly seeking new money with a third of the $46 billion valuation it made last year.
The new money was not needed, says Hanno Rayner, Persono co-founder and CEO, but the “piling” of money on the company’s balance sheet will support its growth over the next two to three years, and new acquisitions. The startup acquired Back, a Berlin-based company that automates frequently asked employee questions about leave and payroll, in May.
“We had a feeling the time was right with everything going to support our balance sheet, the ability to continue to make reasonable investments over the coming years, and the ability to make the right decisions for the company,” says Rayner.
Personio charges around $190 per month from small European companies to help automate routine HR tasks such as hiring tracking, payroll, and performance reviews. Renner says the recurring returns from the startup’s six-year-old client have played a bigger role in conversations with investors since the war in Ukraine triggered a sharp sell-off in public markets, particularly tech stocks.
“What really changed was there was a much more focus on fundamentals like sales, sustainability and business efficiency,” Renner says. “We’ve always been strong about that, but people haven’t cared so much in the last couple of years and have always been interested in growth.”
Rayner says he plans to keep Persono private for the foreseeable future, and could make the startup profitable by slowing investments. “We can turn a profit if the funding dries up completely without any big cuts just by not increasing our costs or staffing,” he says.
The $200 million investment represents Persona, one of the most valuable German companies behind process mining software startup Celonis, and digital bank N26. “We believe Personio is among the best SaaS companies in the world, with rapid growth, a sustainable business model, and exceptional leadership,” says Neil Mehta, founder and managing partner at Greenoaks Capital, who led the October round.
Mehta earned a spot on Midas’ list of top tech investors in 2022 thanks to being an early supporter of South Korean e-commerce giant Coupang and investments in Stripe, Checkout.com and Robinhood.