PayFit, a French HR/Payroll SaaS platform for SMBs, has crossed the unicorn threshold with a $288 million Series E round. The round, announced yesterday, was led by General Atlantic, a leading global growth equity firm. Also participating are existing investors Eurazeo, Bpifrance, and Accel Ventures.
According to PayFit, this is the largest-ever funding round for a French HR startup. A bit of a small pond, perhaps. But it’s always nice to be a big fish. The funding round gives PayFit a $2.07 billion valuation, according to the company.
Europe’s First 2022 Unicorn
This makes PayFit Europe’s first unicorn of 2022. Granted this year is young. But it is notable that the first company to hit that milestone this year is a small business software play.
So what is PayFit’s story? And why is it raising so much money? The company was founded in 2015 by Firmin Zocchetto, Florian Fournier, and Ghislain de Fontenay. Including its latest round, the company has raised $495.3 million to date, according to Crunchbase
PayFit has recently expanded from its home in France into Germany, Spain, and the United Kingdom. The currently has about 700 employees and plans to scape up to more than 1,000 within the next 12 months.
“As we look ahead, we plan to use these new funds to deepen our presence in our existing markets, where we have significant growth potential,” said co-founder and CEO Zocchetto. “At PayFit, we are proud to have built a company with strong foundations, where people are happy to work and that can have a real impact on our clients. This Series E funding will allow us to maintain the rapid growth we have achieved since our founding.”
The company offers payroll and workforce management SaaS solutions aimed squarely at the small business market. On its website, it says it serves more than 5,000 customers. And it also makes the following claim. “When switching to PayFit, customers reduce the time spent running payroll by 80%.”
European Land Grab
PayFit isn’t the only HR SaaS company recently raising big euros to help Europe’s SMBs access highly automated HR tools once reserved for large enterprises. In 2021, we covered significant raises by Germany’s Personio and Spain’s Factorial.
Last January we covered Personio’s $125 million Series D round at a $1.7 billion valuation.
Personio targets SMBs (SMEs to Europeans) with between 10 and 2,000 employees. This is not necessarily the standard SMB definition. The company has thus far acquired some 3,000 SMEs in Europe. Co-founder and CEO Hanno Renner indicated that there is a new wave of business owners in the SME space that are now realizing the power of having a “modern” and integrated human resources platform.
Factorial’s product automates every step of the HR process, collecting data along the way. The company feeds this data back to customers in the form of insights that companies can use to make better people-related decisions. The company’s stated ambition is to become “the global leader of SME HR technology.” The company targets companies as small as 10 employees, all the way up to 1,000.