Recently at EIT Digital Conference in Brussels and the Noah Conference in London, we met the young and dynamic Hanno Renner, CEO of one of the most promising HR tech startups in Europe — Personio. It’s a German HR-management and recruiting software company founded in 2015 and based in Munich.
Their product allows companies to digitise all HR processes along the employee life-cycle. Also, the startup acts as a knowledge broker within the HR-industry and hosts conferences, networking events for HR-managers and serves interested parties with in-depth knowledge via their company blog.
Back in January 2019, Personio raised €35 million funding in a Series B to push to become Europe’s leading provider of human resources software for small and medium-sized companies (SMEs). The company claims that more than 1,000 clients in 35 countries, with anywhere between 10 and 2,000 employees each, are already using Personio for their HR and recruiting processes. In total, over 150,000 employees and several hundred thousand applicants are currently being managed with Personio. So, how did it all start? and what the company holds for future growth? We get to know more in our conversation with the CEO.
From a skipper to CEO!
After working as skipper of sailing yachts for many years next to his studies, Hanno decided to start Personio with his three study colleagues Roman Schumacher, Ignaz Forstmeier and Arseniy Vershinin right after graduating from university. Hanno holds degrees in Industrial Engineering and Technology Management from TU Munich and CDTM, studying abroad at Columbia University in New York.
He had two motivations for starting a company, the first one was working with people from different backgrounds and the second was Renner’s motivation to solve a problem for people. And so Personio came into existence.
“We started in 2015 and focussed on HR in the SME market. Most of our competitors concentrate more on the sexy side of HR, like recruitment. But we take care of the more boring stuff like contract management, payrolling etc. And it’s quite a significant market, we estimate it to be around 30 billion in Europe alone,” says Renner.
Now, Personio has around 300 employees, over 1,500 customers and has offices in Munich, London and Madrid. Talking about the office culture Renner notes, “We may be a Germany company, but we have 42 nationalities. My co-founder is a Russian, so since the beginning, we spoke English in the company and in most of the teams it is a dominant language. The rule is that if you are talking in German at the coffee machine and someone approaches who doesn’t know the language, you switch to English.”
In 2019, tech advisory firm GP Bullhound has identified Personio as one of the top 50 European startups with the most potential to become $1 billion companies in the next two years.
Digitalising the entire HR process
“We’re trying to digitise entire HR lifecycle, from recruiting and managing employees, contracts, and more. Then there’s also paying them with an entire payroll system.” Renner says that their HR Operating System is geared towards helping the customers save time administrative work so that they can be more efficient and focus on being more productive.
Utilising funds to fuel growth
In 2019, the company “bootstrapped” to nearly 100 customers in the first one and a half years, before taking a seed round of €2.1 million in July 2016, Personio then went for a Series A funding of €10.5 million in July 2017.
With the latest Series B funding, which took place during the beginning of this year, Personio aims to execute its strategy and drive growth. With funding a little over €50 million in total till now, Renner says he is hiring 20-25 people in a month, who are personally on-boarded by the executive. Personio also acquired Spanish API startup Rollbox in April 2019. The biggest news is of the company’s international expansion into areas like the Benelux, UK, Nordics and Spain.
“Choosing the right country is not always easy. If the country has a lower digital adoption, that might make the barrier to entry higher but the market potential still would be very interesting. We have a product that’s easily adapted to every single market.”
No plans for US expansion
However, expanding to the US is not on Personio’s list right now. Renner says, “The European market is the same size as the US market, and we can offer a lot to SMEs here. However, if you’re selling to software companies then you eventually have to go to the US because that’s where all the big software companies are. As for SMEs, there are 1.7 million of them in Europe, and we want to help them digitise and with that, we can build a multi-billion dollar revenue business, and therefore there’s no need for us to expand to the US in the near future.”
When asked if Personio is a threat to the HR industry or does it complement the trade? Renner says that their HR OS is in no way a threat to the industry. In fact, the software is supposed to enable better management of manual work that can be done easily via a software such as calculating vacation days for employees, onboarding process, enabling and verifying purchases and more.
Personio’s mobile app coming soon!
While the HR Operating System by Personio is available as a web version, the company is also looking to launch a mobile app for its users by the end of 2019. It will be for all employees of companies that use Personio. The employees will be able to use a host of services like request for vacation or report that they are sick and upload a sick certificate.
Plans to raise another round
While Personio has raised notable capital in its previous rounds, the company will be aiming at raising more capital at some point in the next year. “It’s a natural thing when you’re a fast growing company to invest everything you take in from customers directly into the product again. Then, of course, you need fixed funding for growth, which is what we want to do,” says Renner.
Not to forget to mention, Hanno Renner was also a keynote speaker at the EIT Digital Conference, held in Brussels in September 2019.