This one was interesting to me because I write about Human Resources and its functionality a lot, and here comes a cloud-based HR services company called Zenefits that may disrupt the entire HR industry (see the video above). It just raised a $66.5 million financing round — hardly Uber, but nothing to shake a stick at — which includes Jared Leto, who said this:
“This incredible company is the future of H.R.,” Mr. Leto said. “They help us focus on people, creativity, and growing business, rather than paperwork. It’s a great solution for all kinds of companies and all types of businesses. I’m excited to be an investor and help them as they grow in the entertainment and technology space.”
If you missed that above, Jared Leto — i.e. Jordan Catalano, i.e. the Best Supporting Actor winner from Dallas Buyers’ Club — is now dropping dime on Human Resources software. The valuation for Zenefits is about half a billion dollars right now, and while it’s not yet profitable, it is growing about 30 percent per month — and while it began with about 96 percent of its clients (users) being tech companies, now it’s 60 percent non-tech companies (and 60 percent outside of California). They’ve also increased their headcount from 15 to 120 in the past year.
“They’ve completely outperformed the business case that they presented, which doesn’t happen very often,” said Lars Dalgaard, a partner at Menlo Park, California-based Andreessen. He said its clients include “everything from steel mills to charter schools and even a circus.”
This will be interesting to see evolve. If you can essentially automate the primary functions of HR within the cloud, there are two ways that an organization could go off of that — they could essentially torch HR and re-invest the headcount elsewhere (which some might do), or they could re-focus HR on “talent strategy,” namely hiring the best people and structuring effective ways to retain them. Or, they could turn HR into the true “big data” center that some think might be coming.
Regardless, a half-a-billion valuation for an HR company is something of note — if this catches fire, seeing where it goes and what it does to the mid-size to larger organizations that adopt it will be big stuff in terms of issues like employee engagement. Plus, their office has a bar: