German HR Startup Personio raises $200 million

As many startups struggle to raise extra money or cut corners, some investors want to double their previous bets. San Francisco-based venture capital fund Greenoaks Capital has led a new $200 million round for HR startup Personio, valuing the company at $8.5 billion.

The unusual preemptive investment extends Personio’s $270 million Series E round, which builds HR software for small European businesses, which was raised in October. The deal also indicates that multiples for high-growth startups like Munich-based Personio, which has doubled its revenue since the last round, have softened along with public markets. Other European unicorns like Klarna are reportedly seeking new funds at a third of the $46 billion valuation it reached last year.

Hanno Renner, co-founder and CEO of Personio, says the new funds weren’t necessary, but that “piling up” money on the company’s balance sheet would support growth over the next two to three years and new acquisitions. The startup in May acquired Back, a Berlin-based company that automates common employee questions about leave and payroll.

“We felt that now was a good time with everything going on to support our balance sheet and continue to make wise investments and make the right decisions for the business for years to come,” said Renner.

Personio charges small European businesses around $190 per month to automate routine HR tasks such as recruiting tracking, payroll, and performance reviews. That recurring revenue from the six-year-old startup’s 6,000 customers had played a bigger role in investor talks since the war in Ukraine led to a sharp sell-off in public markets, especially technology stocks, Renner said.

“What really changed there was a lot more focus on the fundamentals like sales, sustainability and the efficiency of the business,” says Renner. “We were always strong in that, but people didn’t care much about growth in recent years and always cared about growth.”

Renner says he plans to keep Personio as a private company for the foreseeable future and make the startup profitable by slowing down investments. “If funding dries up completely, we could be profitable without major cutbacks simply by not increasing our costs or headcount,” he says.

The $200 million investment marks Personio as one of Germany’s most valuable companies behind process mining software startup Celonis and digital bank N26. “We believe Personio is among the best SaaS companies in the world, with rapid growth, a sustainable business model and exceptional leadership,” said Neil Mehta, Founder and Managing Partner of Greenoaks Capital, who also led the October round.

Mehta earned a spot on Midas’ list of top tech investors in 2022 thanks to an early backer from South Korean e-commerce giant Coupang and investments in Stripe, Checkout.com and Robinhood.

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