After growing rapidly over the last few years, Employment Hero has raised a whopping $263 million.
👉 Background: Employment Hero was founded in 2014 as an HR and payroll platform. Since then, it has grown to process $85 billion in wages annually for nearly 300,000 small and medium-sized enterprises.
👉 What happened: After growing rapidly over the last few years, Employment Hero has raised a whopping $263 million. And this isn't its first rodei - Employment Hero has raised a total of $650 million since 2014. And while Employment Hero is already operating outside Australia, its goal is to double down on the UK market.
👉 What else: This valuation of $2.13 billion is a 75% jump on its previous valuation last year of $1.25 billion. And this goes against the grain of many tech companies who have been doing 'down rounds'.
💡A down round is when a company raises capital at a valuation that is lower than its last capital raise. For example, Klarna raised at a $45.6 billion USD valuation in 2021 and then at a valuation of just $6.7 billion USD in 2022. That's an 85% decline.
💡Down rounds can lead to a big equity dilution for investors, founders and other shareholders. But according to Carta, this is the current reality with nearly 20% of all startup capital raise rounds raised in Q2 2023 having been down rounds.
💡But unlike those suffering down rounds, Employment Hero is now armed with hundreds of millions of cash to take on its competitors, Rippling and HiBob in a 3-unicorn race.
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