Employment Hero hits $2 billion valuation after whopping $263 million Series F

HR platform Employment Hero has landed 2023’s biggest local raise, bagging $263 million in a Series F led by US fund Technology Crossover Ventures (TCV).

It’s the second nine-figure raise this week with Canberra startup Skykraft announcing a $120 million round for its satellite-based air traffic management system.

Employment Hero’s backing from TVC remains subject to Foreign Investment Review Board approval, while existing investors, including Insight Partners, AirTree, Seek Investments and OneVentures once again chipped in.

The fresh cash delivers a $750 million uplift – 60% – in the value of the business in the 20 months since the decade-old tech HR and payroll software platform raised $181 million at a $1.25bn valuation.

All up, Employment Hero has now pulled in more than A$650 million in venture funding, including a $140 million Series E led by Insight in July 2021 and a $22 million Series C in mid-2019. It first took on VC funds in 2016 with a $4.5 million raise.

This round is earmarked for global expansion as the business moves beyond its initial offering to deliver a super-app called Swag for small-to-medium-sized companies to manage recruitment, onboarding, payroll and talent management. The business is also looking to expedite the global rollout of SmartMatch, its AI-driven recruitment solution.

Cofounders Ben Thompson and Dave Tong said the capital injection is a further endorsement of their vision.

“Whilst we were not actively seeking funding, our growth story has meant that we have received significant inbound investor interest – this has given us incredible confidence in our vision and allowed us to opportunistically boost our balance sheet, even at a time when the funding environment has been tight,” Thompson said.

“TCV is a leading technology investor with an enviable track-record backing many of the world’s most ubiquitous digital platforms like Airbnb and Spotify, so we are very excited to welcome them aboard as we do the same for employment.”

Thompson, the CEO, said Employment Hero’s vision is “to open doors to a world where talent flows like water through a pipe” for SMEs and become the dominant player in the market.

“Businesses can seamlessly plug into our unparalleled reservoir of talent, with automatic compliance and compensation mechanisms,” he said.

“We’re on a trajectory to become the world’s largest centralised payroll and recruitment hub, reaching all markets with our highly automated infrastructure. Our sights are set on becoming a $50 billion plus business, so our financial aspirations match the scale of our global vision.”

TCV partner Alexander Wortmann said Employment Hero is a best-in-class human resources information system, offering integrated HR and payroll functionality across multiple geographies.

“By connecting businesses to a vast pool of talent, Employment Hero is now reimagining recruitment and payroll for the modern age,” he said.

“We look forward to partnering with Employment Hero’s talented team to execute on this exciting growth trajectory and global expansion.”

The company now has more than 200,000 businesses as customers and also announced the launch of the Hero Foundation, to help employ 1 million people from difficult or underprivileged communities over the next decade.