Zenefits Raises Over $500 Million After $4.5 Billion Valuation
Zenefits was the software start-up star of 2014. It also looks like it will remain that way in 2015.
Forbes is reporting that Zenefits a Series C revenue drive, funded by companies like Fidelity and TPG, that raised more than $500 million, which values Zenefits at over $4.5 billion. The revenue drive far exceed the $1 billion target. This makes Zenefits one of the top 20 highly venture-backed tech startups worldwide.
The two previous revenue drives were successful for Zenefits, but not like this last one. In January 2014, their Series A drive netted $15 million. In June of last year, their Series B drive netted $66 million.
Zenefits offers an all-in-one human resources software platform that will provide small businesses covering all employee platforms including health insurance, payroll, compliance, and organization. The key to Zenefits’ success is that the software is free of charge to subscribing small business. Zenefits makes their money as a services broker, collecting a fee when a business signs up for a service through Zenefits. For example, if your company were to sign up for health insurance through the Zenefits software, Zenefits collects a fee for connecting the two parties.
Zenefits’ recent monetary push has put CEO and cofounder Parker Conrad in position to be the world’s next billionaire. The 34-year-old Conrad runs a company with over 1,000 employees and a majority ownership of stock, though he will not disclose the percentage.
The San Jose Mercury News is reporting that Zenefits has grown from a three-person startup to its current state. “The company is growing faster than any software business that we’ve seen,” said Jules Maltz, a partner at Institutional Venture Partners, a Zenefits investor in the Series B funding. “The potential market opportunity for the company is so large that it could be an enormous public company at some point.”
Zenefits currently has upwards of 10,000 customers, up 2,000 from their end-of-year total. Zenefits closed more new business in the month of March than it had in its first 15 months of existence.
Conrad’s ultimate goal is to provide its services to the 5 million small businesses that employ between 2 and 1,000 employees. “We want to continue growing really fast and there are places we want to get to,” Conrad said. “So we need a lot of gasoline so we had to make a pretty big pit stop to fill up the tanks.”
Conrad is not new to tech startups. Both he and fellow Zenefits cofounder and CTO Laks Srini first created Wikinvest, which later changed its name to Sigfig. Soon after, both Srini and Conrad were removed from Sigfig.
[Image courtesy of Get Apps]
