Australian-based human resources technology firm, Employment Hero, has raised $263 million in its latest Series F funding round — the largest capital raise in the region this year for a privately held software company. The substantial influx of capital boosts the company's valuation to nearly $2 billion, up from $1.25 billion in its prior round.
Investor confidence makes a comeback
After an 18-month lull in start-up valuations and sporadic, smaller capital raisings both domestically and globally, Employment Hero's raise is a clear indicator of renewed investor confidence. It follows on the heels of Canberra space technology firm, Skykraft, securing $120 million in funding and the $28 million earlier stage round for Darwinium, a local cybersecurity start-up.
Key players and future plans
The funding round was spearheaded by new investor TCV (Technology Crossover Ventures), a US-based firm, and awaits approval from the Foreign Investment Review Board. Returning investors included Insight Partners, AirTree Ventures, Seek Investments and OneVentures.
Employment Hero co-founder and chief executive Ben Thompson said that although the firm was financially stable without this new round, having TCV on board added strategic value, given TCV's notable investments in companies like Spotify and LinkedIn.
Employment Hero has evolved from its original platform designed for managing new employees' administration. The company recently launched Swag, a "super app" aimed at revolutionising the online recruitment sector. The app provides multiple services, such as task management and digital wallets, and has attracted over 542,000 users.
Global outreach
Thompson said the new funding would enable Employment Hero to substantially scale up its operations and give a significant bolster the firm's chances of success in a crowded UK market.
The UK market holds promise, but Thompson plans to proceed with caution. The aim is to double the size of its UK team to 180 members to better serve its existing clientele of 20,000 small- and medium-sized enterprises (SMEs).
An IPO is not in the immediate roadmap for Employment Hero as the latest capital influx provides enough runway for future initiatives. Earlier investors, including OneVentures, have been able to realise returns through secondary sales.
TCV general partner Muz Ashraf and partner Alexander Wortmann expressed their positive outlook on Employment Hero, citing its potential to reimagine recruitment and payroll in the modern age.