With an aim to simplify payroll and human resource management for all European SMEs, Paris-based HRtech startup, PayFit, has raised €90M in its series D round of funding. The investment round follows the company’s 40 per cent growth in 2020.
The Series D round was led by Eurazeo Growth, Large Venture, and BPI France. The round also saw participation from existing investors, including Accel, Frst, and French billionaire Xavier Niel.
How will the funds be utilised?
The raised capital will enable PayFit to continue developing its HR solution and support its hypergrowth by increasing its headcount by 50 per cent to about 800 by the end of 2021. Besides, the company is also gearing up for an 80 per cent growth this year.
HRtech SaaS platform
According to the European Economic and Social Committee, there are 24 million SMEs in Europe (including startups) that have been hit hard by the pandemic. And, PayFit wants to step in and help them via its Software-as-a-Service (SaaS) platform to provide complex and time-consuming payroll and HR tasks – so that the SMEs can focus on their growth.
The company was founded in 2015 by Firmin Zocchetto, Florian Fournier, and Ghislain de Fontenay. It has developed a Human Resources Information System (HRIS) module to help startups digitalise their entire HR process, as well as save time and money post-pandemic.
Currently, PayFit serves more than 5,000 SMEs with 100,000 employees, some of which include Revolut, Starling Bank, and Treatwell, among others.
New HR functionalities
As of now, PayFit centralises payroll, HMRC submissions, absences and holidays, expense reports, employee onboarding, and employee contact information. In addition, the company also provides relevant data analysis to identify gender pay gaps in organisations.
Under PayFit’s Human Resources Information System (HRIS) module, it is developing existing and new features such as weekly meetings and feedback surveys to help companies positively impact their employees’ lives by boosting engagement and closing gaps between managers and employees. Also, HR professionals will be able to manage all HR and payroll functions in one single platform.
The new developments will be carried out internally and through integrations with other digital players. These partnerships will help PayFit’s customers digitise and support the entire HR ecosystem within a company.
Explaining the situation, Firmin Zocchetto says, “All of our clients do their payroll on our solution, but not all of them manage their HR with us. Having additional HR modules will help our clients to become increasingly digital, more efficient, and support their growth.”
To implement these features, PayFit plans to recruit 250 employees in 2021, focusing on product teams. Currently, the company has 550 employees in its offices in Paris, Berlin, Barcelona, and London. And, with the raised capital, it expects to reach headcounts of 800 by the end of 2021 and 1,000 by the end of 2022.
Digitalisation crisis in Europe
The pandemic has highlighted the importance of digitising administrative processes, and according to a survey in 2020 by ‘HR in everyday life’, HR professionals claim to devote at least half of their working time to administrative tasks.
For HR teams, digitisation of admin tasks presents an opportunity to focus on more high-value activities such as employee training, career progression, and learning & development initiatives.
Firmin Zocchetto, CEO and co-founder of PayFit, explains, “As a result of the pandemic, HR professionals have faced a much higher workload and previously unknown challenges. They have had to deal with various issues: from supporting the company’s management with the implementation of remote work policies to ensuring employee wellbeing through new initiatives.”
With the number of SMEs operating in Europe, the health crisis has made digitalisation a priority for many of them, and Firmin Zocchetto sees this as an opportunity for PayFit to strengthen its position in the market. “There are still tens of millions of SMEs that want to go digital. The market is huge, and our ambition remains the same: to become the point of reference for payroll and HR management for all SMEs.”
In 2016, PayFit raised €5M from Xavier Niel and The Family, €14M from Accel in 2017; and a further €70M from Eurazeo and BpiFrance in 2019. At the last VivaTech show, PayFit had also received the “next European unicorn” award in the B2B category for SMEs.