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· Posted on
February 21, 2024

Employment Hero just became Australia's newest unicorn

Can I get a HOYA?! Employment Hero now joins Canva, Atlassian and Airwallex in the unicorn hall of fame.

What's the key learning?

  • Employment Hero just raised $181 million at a valuation of $1.25 billion (#unicorn)
  • It plans to use some of the cash to acquire KeyPay
  • Raising capital to fund an acquisition is a common strategy, and it saves companies from draining their own capital to do it.

Background: Employment Hero is an Aussie software company that helps businesses manage their HR, payroll and benefits. It was founded back in 2014, and now has around 80,000 small and medium sized businesses using it.

 

What happened: The company raised $140 million in July last year, taking it to a valuation of $800 million (just short of the 'unicorn' status).

 

What else: Now, Employment Hero has raised $181 million at a valuation of $1.25 billion (#unicorn). And it plans to use a significant amount of that money to acquire Aussie workforce management firm KeyPay.

 

🔔 What's the key learning?

 

💡When companies raise capital from investors, they usually do it for one of three key reasons.

 

💡 We've got:

  1. To fund grown in the business (i.e. increase staff or develop new products)
  2. To re-balance the capital mix (i.e. pay down some debt and sell equity)
  3. To fund an acquisition (i.e. to buy another company)

💡Raising capital to fund an acquisition is a common strategy, and it saves companies from draining their own capital or taking out a bank loan to do it. 

‍

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