Smart HRThe cloud-based human resources and labor management software startup said Monday it has raised $140 million in a funding round led by KKR and Teachers’ Ventures Growth, the investment arm of the Ontario Teachers’ Pension Plan, with participation from existing investors.
The Series E round comes three years after the company was raised Series D price $142.5 million (15.6 billion yen). when pricing $1.6 billionis the latest indicator that investors remain eager to support technologies that help firms more effectively manage their largest cost base: staff.
The company didn’t want to comment on its current valuation.
SmartHR, founded in 2015 by Kensuke Naito and Shoji Miyata, has been having fun with high demand for several years for its SaaS platform that helps enterprises manage human resources and improve their operations. As of February 2024, its annual recurring revenue (ARR) reached $100 million, a significant increase from the $80 million in total revenue reported in fiscal 12 months 2023, a company spokesperson told TechCrunch.
This growth is in line with the strong demand for HR technology we are seeing in other parts of the world. US-based Rippling, which SmartHR says is the closest comparable company in terms of products and strategy, saw its ARR double to $350 million in 2023, according to information. Gusto, which offers payroll management software and services, told TechCrunch that its revenues topped $500 million by April 2023; and Deel, which manages payroll for international firms, reported in March this 12 months that it had achieved ARR of greater than $500 million.
There is also loads of enterprise capital in this market, estimated to be price as much as $81.84 billion by 2032. Fortune Business Insights. Rippling, one of the largest startups in the industry, has raised about $2 billion, according to Crunchbase, and said it was valued at $13.5 billion after a $200 million funding round in April. Gusto has raised nearly $750 million, Crunchbase data says, and is price about $9.6 billion, according to PitchBook. And Deel, price $12 billion, has raised a total of $679 million, according to Crunchbase.
And investors are throwing money at smaller startups, attacking almost every aspect of traditional HR: Remofirst, which helps its clients hire globally without having to arrange local offices, recently raised $25 million; Palm is betting on mobile devices to improve the HR technology experience in the MENA region and received $5 million last 12 months; In January, Compa received $10 million to build a platform that gives aggregated salary data to recruiters so they might be more competitive when hiring; and Legion last month raised $50 million to automate hourly workforce management at firms.
SmartHR’s peer competitors in Japan include back-end software players such as Works Human Intelligence, Freee and Moneyforward. The company stands out because it “obtains the latest and most accurate employee data through work management, which positions it as a documentation system in the HR space,” its spokesman said, adding that using this worker data allows it to quickly implement recent products.
The startup said the recent capital will go towards recent development, hiring, and organic and inorganic (read: mergers and acquisitions) growth strategies. It currently employs roughly 1,000 employees.
His previous backers include Light Street Capital, Sequoia Capital Global Equities and Whale Rock.