HR platform Employment Hero hits $1.25 billion valuation following $181 million raise

Small business HR platform Employment Hero has raised $181 million in a round that values the tech company at $1.25 billion.

Existing backer SEEK Investments led the raise, supported by Sydney VCs OneVentures and AirTree.

The new cash pushed the value of the business up by $450 million following a $140 million Series E raise in July last year, led by US VC Insight Partners.

Co-founder and CEO Ben Thompson said the new valuation is recognition of all the hard work by his team.

A large slice of the cash was used to acquire 12-year-old local payroll business KeyPay, which Thompson backed as a seed investor a decade ago.

The remainder will go to nearly doubling the headcount to 1000 this year and product development.

KeyPay has a well-established footprint across Australia, New Zealand, Singapore, Malaysia and the United Kingdom, allowing Employment Hero to further accelerate its growth initiatives in those markets. The business has more than 60,000 customers.

KeyPay will remain an independent brand and co-founders Phil Bernie and Paul Duran will stay on at KeyPay as Managing Director and Chief Technology Officer, respectively.

The acquisition means Employment Hero now has more than 80,000 SME companies on its customer base.

Thompson said that bringing KeyPay, means the eight-year-old business now offers employment management solutions that covering talent solutions; core HR; payroll and eBenefits.

“Employment Hero’s four pillars allow us to deliver a complete employment platform and service that people can use to find work, manage work, get paid, spend and save,” he said.

“This, combined with KeyPay joining the Employment Hero family, will set a new bar for what people expect from employment. It’s incredibly exciting and we have a lot of work ahead to continue to make employment easier and more valuable, for everyone.”

Andrew Bassat from SEEK Investments said the business had performed exceptionally well over a sustained period.

“Employment Hero is still early in their growth journey with enormous opportunities to pursue and the addition of KeyPay expands the potential significantly,” he said.

OneVentures MD Dr Michelle Deaker said they initially backed the company two years after its launch.

“As the first lead investor into Employment Hero back in 2016, we believed in the thematic foundations of the business as well as Ben’s depth of experience in HR services and business leadership,” she said.

“His ability to build great teams along with his vision to change the world of work was fundamental to our investment decision and we are delighted to see the business go from strength to strength – to what is shaping up to be a $100-billion-dollar market opportunity.”