Barcelona-based Factorial, an all-in-one people-first automated HR management platform for SMBs, announced on Tuesday that it has raised $120M (approximately €123.39M) in a Series C round of funding.
The company has now entered the “unicorn” club at a valuation of $1B (approximately €1B).
The Series C investment was led by London-based Atomico. And as part of this deal, Atomico’s partner, Luca Eisenstecken, has joined the Factorial board. Additionally, GIC and all previous investors, including Tiger Global, CRV, K-Fund, and Creandum, also participated in the round.
Factorial CEO and founder, Jordi Romero, says, “HR has gone through a seismic shift across every industry – from a focus on workforce control to the primary function of empowering and challenging your employees. Getting this right results in a key SMB strength: a close-knit, people-centric culture that many workers seek. We are proud to partner with Luca and the Atomico team, to address this massive shift of SMBs searching for HR software built just for them.”
Pain points of SMBs
Factorial claims to be addressing two interconnected issues that small and growing businesses all over the world face.
Firstly, dedicated HR professionals are typically not hired by small and medium firms until much later in their expansion. SMBs hence find it difficult to maintain their competitiveness while managing the complexity of their workforces due to rising hybrid and remote work, labour shortages, and talent rivalry.
The second problem is that SMBs are underserved in the HR software industry compared to bigger businesses, which are these products’ primary consumers. Only 30 per cent of SMBs have used software to source and recruit candidates in 2021. Most SMBs continue to manage tasks like shift schedules, onboarding, sick leave, and payroll as best they can by using just spreadsheets and emails.
These two considerations have left SMBs to miss out on developing an organisation that places its people at the centre, which ought to be a fundamental strength.
Solution provided by Factorial
Founded in 2016 by Jordi Romero, Bernat Farrero and Pau Ramon, Factorial aims to enable SMBs globally to make better people decisions based on data and increasing data-driven insights.
By automating and centralising processes such as recruiting, onboarding, absence management, payroll, and time tracking, Factorial claims to help companies reduce up to one week of repetitive, administrative tasks per month.
By consolidating all HR functions under one roof, Factorial claims that its offering makes every HR feature 10x more powerful and 10x more seamless (instead of a complex suite of multiple tools, platforms and features). For instance, having time tracking automatically connected to compensation, performance management and payroll becomes easy when all the features are in the same SaaS platform.
Factorial has witnessed rapid growth in the past, including, over 200 per cent yearly revenue growth since 2019, 3.7X growth since its Series B funding a year ago, and an 800-person team spread across offices in Brazil, Mexico, and Spain.
With over 7000 customers across nine countries, the company serves clients such as Freshly Cosmetics, Vicio, Booking.com, and Whisbi.
Capital utilisation
Factorial says it will use the funds to further scale its operations in existing markets across the UK, Spain, the US, Germany, Italy, Portugal, France, Mexico, and Brazil, including opening a dedicated office in Miami, and expanding into new markets globally.
Additionally, the capital will also help expand the company’s product depth and feature range, thereby solving more problems related to people management for SMBs.
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