We’re thrilled to welcome Personio to the Lightspeed family as we invest in their $75M Series C alongside our friends at Accel, Index, Northzone, and GFC. Personio is the leading HR suite for SMEs in Europe, enabling nearly 2000 organizations to streamline their HR operations.
HR tech is an enormous software category. Most horizontal software applications have a departmental constraint — e.g. CRM for sales, ITSM for IT/ops, SIEM for security, and so on. Meanwhile, the HR department, by definition, touches 100% of employees in an organization. Regardless of company size or industry, every employee at some point goes through a recruitment funnel, is onboarded, retained in a general employee database, and receives payment in exchange for time worked. There are seven HR and payroll software companies in the US with over a $5 billion dollar market cap with more unicorns in the funnel, yet no companies in Europe share a similar magnitude despite the continent possessing a comparable number of SMEs (roughly 30M). That’s because innovation typically starts with a premium product servicing those with the deepest pockets before being democratized, and as such the first wave of SaaS neglected the very businesses that serve as the lifeblood of Europe’s economy.
Now European small businesses have a platform dedicated solely to their success. In four short years, Hanno Renner and the team at Personio have built out an HR operating system to remove the administrative burden that comes with managing staff. Their product covers the entire employee lifecycle, including posting a job req, managing your talent funnel, converting applicants to employees, maintaining up-to-date employee records, tracking hours works, and processing payroll. Owning all employee data earns Personio the right to extend into a platform. Personio’s atomic unit is the employee, and any product that touches all employees can reduce friction for their end customers by plugging into Personio, such as tools for performance mgmt. and employee engagement.
One of our core investment theses at Lightspeed is leveraging software to automate back office operations and allow companies to focus on their core competencies. Managing employee records and processing payroll are a few examples of tasks that all companies have and as a result are no company’s competitive advantage. Instead of wasting valuable hours each month updating sensitive information across duplicative Excel files, tracking hours worked, and consistently dealing with end-of-month headaches come payroll time, customers trust Personio to pre-populate and complete those tasks for them.
Even more special than the product is the team behind it. Hanno isn’t your traditional Silicon Valley serial entrepreneur. His last job was as a yacht skipper where he led a fleet of yachts and their crews. He wears that background on his sleeve, not least of which because it gave him the time and flexibility to start building Personio on the stern of his boat while basking in the Mediterranean sun. Yet Hanno and the Personio team have assembled one of the most operationally rigorous, action oriented organizations we have been a part of, traits that have allowed them to accelerate growth each of the past three quarters.
At Lightspeed, we look for companies with outlier potential as defined by the size of the market, quality of management team, and the staying power of their product. Personio scores in the top decile across each category. We couldn’t be more excited to join them on this journey.
-Arsham Memarzadeh, Brad Twohig, and Rytis Vitkauskas
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