After buying the founder’s own business for $43 million, Employment Hero spends another $112m on a Canadian rival

Small business HR and payroll platform Employment Hero has spent $112 million acquiring a Canadian rival as part of ambitions to expand into the North American market.

The scaleup’s founder and chief economist, Ben Thompson said Canada has been in our expansion plans since their Series A, eight years ago

“Humi is Canada’s leading employment platform supporting almost 30,000 employers and 150,000 employees,” he said.

“2025 is going to be our biggest and best year by far.”

In 2023 Employment Hero hit a $2 billion valuation following a $263 million Series F. The decade-old software company’s cap table also includes US fund Technology Crossover Ventures (TCV), Insight Partners and Seek Investments. In 2023, OneVentures turned $8.8 million investment into $116m.

Just before Christmas, corporate filings revealed the price Employment Hero paid to acquire Thompson’s s side hustle, the loss-making professional services firm Employment Innovations, last April, was $43.4 million, nearly double its FY2024 revenue of $22.6 million.

The company said the deal was “negotiated at arm’s length”.

But it went through at a time when Thompson was embroiled in a messy and very public fight with one of the company’s investors, Hostplus, with the founder claiming the super fund “wants to put us out of business” and have him sacked.

Hostplus threatened last March to report Thompson to the corporate regulator, ASIC, and wrote to fellow investor, VC fund Airtree, calling on Employment Hero’s board to consider whether his “position as CEO remains tenable in the light of his conduct”.

Thompson accused Hostplus of lying and abusing its market power on LinkedIn, but ultimately, all the sound and fury came to signify nothing, and the dispute burnt out as quickly as a match.

But the Employment Hero boss finished 2024 after a series of stories on Capital Brief about the company’s culture, amid a pull back on its push into the Southeat Asian market.

Tech reporter Browen Clune’s coverage of a puerile sexual pun about WiseTech founder Richard White by Thompson on the former Twitter – the Employment Hero boss dismissed it as a “dad joke” – led to multiple current and former employees contacting her concerned about “how staff are treated” and a “fear culture”.

Thompson used social media to respond, denying that an International Women’s Day event had been cancelled and explaining what’s know as “The EH Way”.

Once again, to save people from paying a $39 monthly subscription for Capital Brief, I’ll clarify my side of the story here on X. Don’t believe their sensationalist headlines crafted to drive clicks, controversy and subscriptions.

I did not cancel International Women’s Day at… pic.twitter.com/tqB46kjiK4

— Ben Thompson (@bnthompson) November 11, 2024

The company’s annual Global Gathering, which brings together 1000 employees from around the world, was described as “adult schoolies” and last year 3 people were dismissed following the event in Bali for their behaviour.

Meanwhile, the company has seen its revenue grow 50% to $165.4 million, while its focus on UK expansion saw Employment Hero’s after-tax loss increase to $44.7 million.