Zenefits

Zenefits
Founded February 18, 2013 (2013-02-18)
Area served United States
CEO David O. Sacks
Industry Human resource management
Revenue
  • IncreaseUS$20,000,000 (2014)
  • abt.US$1,000,000 (2013)
Website www.zenefits.com

Zenefits is a company based in the United States that offers cloud-based software as a service to companies for managing their human resources, with a particular focus on helping them with health insurance coverage.[1][2] It was named the fastest growing company in Silicon Valley in 2015.

History

Zenefits was started by its ex-CEO Parker Conrad, who had been a co-founder of Wikinvest, and Laks Srini, Conrad's colleague and a software engineer at Sigfig, to help startups and small businesses find insurance quotes and manage employee benefits in one place. It was part of the Winter 2013 batch of start up accelerator Y Combinator, and officially launched on February 18, 2013.[3]

In October 2013, Zenefits, that had so far been operational only in California and New York, announced that it was rolling out to the other 48 states in the United States, albeit only for businesses with more than 20 employees.[4] In January 2014, the company announced the addition of commuter spending, flexible spending, and 401(k) support in an attempt to replace the more mundane functions currently handled by companies' human resources departments.[5]

In July 2014, the company announced support for stock options in its cloud HR platform.[6]

In November 2014, Zenefits opened an office in Scottsdale, Arizona, where they plan to hire 1300 employees over the coming 3 years.[7]

In December 2014, David O. Sacks, founder of collaboration service Yammer that had been sold to Microsoft, joined Zenefits as the Chief Operating Officer.[8][9]

In January 2015, Zenefits announced that it had revenue of approximately US$20,000,000 in 2014, twenty times the corresponding figure in 2013, despite offering its platform to users for free and making all its money from commissions charged to insurers for being the insurance broker.[10] In April 2015, the company announced that in March 2015, it had added more clients than it had added in its previous 15 months of operations.[11]

Parker Conrad was both criticised and praised when he revoked an offer to an employee who posted a question on Quora to choose between Uber and Zenefits, pondering the question of which would help him land a job at Google in the future.

In May 2015, payroll provider ADP blocked Zenefits from accessing payroll information on behalf of Zenefits customers.[12] In a post on the company's blog,[13] Zenefits alleged ADP was spreading "fear, uncertainty and doubt" about Zenefits data security due to worries about increased competition. In June 2015, ADP filed a lawsuit accusing Zenefits of defamation.[12]

Funding

Zenefits was part of the Y Combinator Winter 2013 batch.[3] In July 2013, Zenefits announced the completion of a seed round led by Venrock and Maverick Capital, with investors including Andreessen Horowitz, Yuri Milner, General Catalyst Partners, Garry Tan, Justin Kan and Alexis Ohanian. The round also included angel investments from Box co-founder and CEO Aaron Levie, Quora co-founder Charlie Cheever, former Googler and Twitter VP of Corporate Strategy Elad Gil, Weebly co-founder David Rusenko, former Googler and Badoo COO Ben Ling, Google’s Head of Spam Slamming Matt Cutts, BuildZoom co-founder and CEO David Petersen, and Inkling co-founder and CEO, Matt MacInnis. Including the company's initial US$372,000 raised from Y Combinator, the company's total funding to date was US$2,100,000.[14]

The company raised its Series A in January 2014, about nine months after graduating from Y Combinator. The US$15,000,000 round included investments from Andreessen Horowitz, Maverick Capital and Venrock, and was aimed at helping Zenefits go after larger customers around the world and become the one-stop solution for Human Resources for their client companies. The round was also accompanied by the addition of Andreessen Horowitz General Partner Lars Dalgaard, the former CEO and founder of SuccessFactors, to the Zenefits board of directors.[15]

The company raised a $66.5 million Series B, announced on June 3, 2014, from return investor Andreessen Horowitz and new investor Institutional Venture Partners, at a US$500,000,000 valuation.[16][17][18][19]

On April 21, 2015, TechCrunch reported that Zenefits was raising somewhere between US$300,000,000 and US$500,000,000 at a valuation worth of US$3,000,000,000, and possibly as high as US$4,000,000,000.[20][21] On May 6, the round was reported to have closed with US$500,000,000 raised from investors including Fidelity Management, TPG, and Comcast Ventures at a valuation of US$4,500,000,000.[11][22][23]

Reception

Zenefits has been identified as one of the fastest growing software as a service companies in history.[17][24] Its revenue growth rate has been compared favorably with such companies as Workday and Salesforce.com,[10] while its valuation growth was also noted by Forbes as being among the highest in 2014.[25] The Wall Street Journal has discussed the rapid growth in Zenefits' own workforce as it scales to cope with a growing clientele.[26]

The New York Times has noted that Zenefits' rapid pace of growth puts a lot of pressure on the company, and cited Zenefits co-founder and CEO Parker Conrad as saying that problems that other companies have a year to solve need to be solved by Zenefits within eight weeks.[1] Forbes staff writer Brian Solomon noted how Zenefits had beaten Airbnb and Uber to become the hottest startup of 2014.[25]

See also

References

  1. 1 2 Manjoo, Farhad (September 21, 2014). "Zenefits’ Leader Is Rattling an Industry, So Why Is He Stressed Out?". New York Times. Retrieved January 21, 2015.
  2. ↑ Lynley, Matthew (May 1, 2013). "Zenefits Tries to Take the Pain Out of Human Resources". Digits (blog). Dow Jones & Company. Retrieved January 21, 2015.
  3. 1 2 Empson, Rip (February 18, 2013). "Y Combinator-Backed Zenefits Gives Small Businesses A One-Stop Shop For Finding And Managing Employee Benefits". TechCrunch. Retrieved January 20, 2015.
  4. ↑ Kumparak, Greg (October 14, 2013). "Zenefits Rolls Its HR Automation Services Out To All 50 States". TechCrunch. Retrieved January 20, 2015.
  5. ↑ Empson, Rip (January 10, 2014). "Fast-Growing Zenefits Adds Commuter Benefits, Flexible Spending And 401(k) Support As It Moves To Take Over Startup HR". TechCrunch. Retrieved January 20, 2015.
  6. ↑ Lawler, Ryan (July 25, 2014). "Zenefits Adds Stock Options To Its Cloud HR Platform". TechCrunch. Retrieved January 21, 2015.
  7. ↑ "Cloud HR Startup Zenefits Opens Scottsdale Office, Plans To Hire 1,300 Employees Over Next 3 Years". TechCrunch. November 11, 2014. Retrieved January 21, 2015.
  8. ↑ Lawler, Ryan (December 10, 2014). "Yammer Founder David Sacks Joins Cloud HR Startup Zenefits As COO". TechCrunch. Retrieved January 21, 2015.
  9. ↑ Bass, Dina (December 10, 2014). "Fast-Growing Zenefits Taps Yammer Co-Founder David Sacks as COO". Bloomberg News. Retrieved January 21, 2015.
  10. 1 2 "Zenefits Financials Reveal It Is One Of The Fastest-Growing SaaS Businesses Ever". TechCrunch. January 14, 2015. Retrieved January 21, 2015.
  11. 1 2 Keohane, Dennis (May 6, 2015). "Zenefits raises $500 million for its HR software and insurance hybrid, beating off new customers ‘with a stick’". PandoDaily. Retrieved May 6, 2015.
  12. 1 2 Hesseldahl, Arik (June 10, 2015). "In Wake of Data Access Dispute, Startup Zenefits Is Sued by Payroll Company ADP". Re/code.
  13. ↑ "Update to our Customers on ADP". Re/code. June 9, 2015.
  14. ↑ Empson, Rip (July 26, 2013). "Zenefits Lands $2.1M From Venrock, Maverick, Aaron Levie, Charlie Cheever And More To Automate Startup HR". TechCrunch. Retrieved January 20, 2015.
  15. ↑ Empson, Rip (January 22, 2014). "Zenefits Adds $15M From Andreessen Horowitz To Become The All-In-One Solution For Startup HR". TechCrunch. Retrieved January 20, 2015.
  16. ↑ Lawler, Ryan (June 3, 2014). "Cloud HR Startup Zenefits Raises Another $66.5M From Andreessen Horowitz and IVP At A $500M Valuation". TechCrunch. Retrieved January 20, 2015.
  17. 1 2 Carney, Michael (June 3, 2014). "Labeled the "fastest growing SaaS company ever," Zenefits raises a $66M Series B just five months post-Series A". PandoDaily. Retrieved January 21, 2015.
  18. ↑ Kokalitcheva, Kia (June 3, 2014). "VCs gave Zenefits $66.5M — because even they don't want to deal with HR paperwork". VentureBeat. Retrieved January 21, 2015.
  19. ↑ Gage, Deborah (June 3, 2014). "Andreessen Leads $66.5M Round for Zenefits in ‘Halley’s Comet’ Deal". WSJ.D (blog). Dow Jones & Company. Retrieved January 21, 2015.
  20. ↑ Lawler, Ryan; Wilhelm, Alex; Lynley, Matthew (April 21, 2015). "Cloud HR Startup Zenefits Is Looking To Raise A Giant New Round Of Funding". TechCrunch. Retrieved April 22, 2015.
  21. ↑ Schubarth, Cromwell (April 22, 2015). "Zenefits is latest 'private IPO' in works, seen seeking $300M-$500M". Silicon Valley Business Journal. Retrieved April 22, 2015.
  22. ↑ MacMillan, Douglas (May 6, 2015). "Zenefits Is Tagged With a $4.5 Billion Valuation After Just Two Years". Digits (blog). Dow Jones & Company. Retrieved May 6, 2015.
  23. ↑ Baumgartner, Jeff (May 29, 2015). "Comcast Ventures Is Friends with Zenefits". Multichannel News (New York City: NewBay Media). Retrieved May 29, 2015.
  24. ↑ Wang, Alexander (September 14, 2014). "How did Zenefits grow so quickly?". Quora (crowdsourced Q&A). Retrieved January 21, 2015.
  25. 1 2 Solomon, Brian (December 17, 2014). "The Hottest Startups Of 2014". Forbes. Retrieved January 20, 2015.
  26. ↑ Weber, Lauren (December 11, 2014). "How a Hot Startup Will Triple Its Workforce in 2015". At Work (blog). Dow Jones & Company. Retrieved January 21, 2015.

External links

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