Zenefits Raises $66.5 Million In Series B Funding Led By Andreessen Horowitz

Enterprise cloud HR automation company on its way to 1300% growth for the year

San Francisco, CA, June 3, 2014 Zenefits, a free, cloud-based HR platform that automates and eliminates time-consuming HR tasks for small- and medium-sized businesses, announced today it has raised $66.5 million with significant investments by Andreessen Horowitz and Institutional Venture Partners (IVP).

Just 12 months after launch, and four months after its Series A round, Zenefits has now raised $84 million in total funding to date.

Zenefits will use the funds to prepare for substantial growth in 2015, to continue building out its core HR technology, and to scale its operations and support infrastructure to meet the growing demand while continuing to deliver world-class support to clients.

“Zenefits is about freeing businesses from the administrative burdens of HR so that they can focus on people, not paperwork,” said Parker Conrad, co-founder and CEO of Zenefits. “We are thrilled that investors share our vision for the company and for what Zenefits can bring to the marketplace.”

Andreessen Horowitz – which led the Series A round – is also leading this round. Investing alongside Andreessen Horowitz are: IVP, SV Angel, Hydrazine Capital, former Twitter and Google executive Elad Gil, and Academy Award-winning actor and investor Jared Leto.

“Zenefits is well on its way to 1,300 percent growth for the year, which is some of the fastest growth we’ve ever seen. With Zenefits, no start-up entrepreneur or human resources head and their team should ever have to spend mind-numbing hours on tedious administrative HR paperwork again, allowing them all more time to lead” said Lars Dalgaard, general partner at Andreessen Horowitz. “This was the hottest deal in Silicon Valley five months ago, and it still is today.”

“Zenefits is scaling faster than any software company that we’ve ever seen,” said IVP General Partner Jules Maltz. “As a later-stage investor, it’s rare for us to participate in large Series B rounds. We’ve only done this a few times for exceptional companies including Dropbox and Snapchat. Zenefits is on a similar trajectory, and we’re thrilled to help them disrupt the HR software market.”

Over the past year, Zenefits has seen explosive growth in its business:

  • Growing a minimum of 30 percent month over month since its launch in early 2013, Zenefits is on track for 1,300 percent growth for the year.
  • Zenefits is working with more than 2,000 companies and serving more than 50,000 employees.
  • Zenefits’ customer base is expanding: 60 percent of new customers over the last three months have originated from outside of California, and 60 percent come from outside the tech sector.
  • Three months ago, 96 percent of Zenefits customers were tech companies, now they make up less than half of Zenefits’ customers. Companies from across multiple sectors have signed up for the service, running the full gamut from a church to a steel mill, a theater to a charter school, and even a circus.

There is enormous upside market potential for Zenefits. More than 99 percent of all businesses in the U.S. with employees are small businesses, and there are approximately 6 million small- and medium-sized businesses in the U.S. with between 2 to 500 employees — all of whom would rather spend less time on HR paperwork.

Zenefits automates a slew of time-consuming administrative HR tasks that companies otherwise have to handle manually, including: benefits and payroll enrollment, on-boarding new hires and off-boarding departing employees, compliance, employee life events, health insurance, and more. Its cloud-based HR platform connects to a company’s existing third-party systems, such as payroll, insurance, and retirement, so that businesses and employees can manage these systems from one beautifully designed, cloud-based platform.

Zenefits is 100 percent free to customers because it is able to collect fees from all kinds of benefit providers. This unique business model is one of the reasons Zenefits has been able to attract so many customers so quickly.

About Zenefits
Zenefits is a free, SaaS-based HR platform that gives businesses a single place to manage their payroll, benefits, and compliance — all online, in one beautiful dashboard. Employers can sync directly with their current payroll, health insurance, and other HR systems in seconds, or use Zenefits to set up with new payroll and benefits providers. Once connected, Zenefits helps automate 95 percent of HR administration work, from benefits enrollment to employee onboarding. Zenefits was co-founded by Parker Conrad and Laks Srini. For more information, visit www.zenefits.com or follow Zenefits on Twitter: @Zenefits.

About Andreessen Horowitz
Andreessen Horowitz backs bold entrepreneurs who move fast, think big and are committed to building the next major franchises in technology. Founded by Marc Andreessen and Ben Horowitz, we provide entrepreneurs with access to our deep expertise and insights in innovation, business development, market intelligence, executive and technical talent, and marketing and brand building. Find us in Menlo Park, California, and at www.a16z.com.

About Institutional Venture Partners (IVP)
With $4 billion of committed capital, Institutional Venture Partners (IVP) is one of the premier later-stage venture capital and growth equity firms in the United States. Founded in 1980, IVP has invested in over 300 companies, 98 of which have gone public. IVP is one of the top-performing firms in the industry and has a 33-year IRR of 43.2%. IVP specializes in venture growth investments, industry rollups, founder liquidity transactions, and select public market investments. Since its inception, IVP investments include such notable companies as AppDynamics, ArcSight (HPQ), Buddy Media (CRM), ComScore (SCOR), Concur Technologies (CNQR), Dropbox, Fleetmatics (FLTX), HomeAway (AWAY), Juniper Networks (JNPR), Kayak (PCLN), LegalZoom, LifeLock (LOCK), Marketo (MKTO), MySQL (ORCL), Netflix (NFLX), ngmoco (DeNA), Polycom (PLCM), Pure Storage, RetailMeNot (SALE), Seagate (STX), Shazam, Snapchat, Supercell, Synchronoss (SNCR), Tivo (TIVO), Twitter (TWTR), and Zynga (ZNGA). For more information, visit https://www.ipv.com or follow IVP on Twitter: @ivp.