Employment Hero valued at $1.25 billion after $181 million raise

Employment Hero Ben Thompson

Employment Hero founder and chief Ben Thompson. Source: supplied.

HR startup Employment Hero has closed another mammoth funding round, with a $181 million cash injection giving it a valuation of $1.25 billion.

The valuation gives the fast-growing startup the bragging rights of ‘unicorn’ status — in Australia at least.

For purists who consider a unicorn to be a business worth over US$1 billion, Employment Hero is still pretty close, valued at about US$899.4 million.

The round was led by Seek Investments, and also included backing from OneVentures and AirTree Ventures.

At the same time, the startup has also announced its first acquisition, snapping up workforce management and payroll solution KeyPay.

The value of the acquisition has not been disclosed, but the two businesses combined now have more than 80,000 small and medium businesses on their platform, who manage more than 750,000 employees.

Founded in 2014 by Ben Thompson and Dave Tong, Employment Hero is a payroll, HR and employee benefit platform designed to help small businesses manage their workforce and boost productivity in the process.

The startup has had a stellar couple of years, largely driven by the COVID-19 pandemic and the mass shift to remote and hybrid working.

In July last year, Employment Hero raised $140 million in Series E funding. That round more than tripled its valuation, which sat at about $250 million just three months earlier.

In a statement, Thompson said the valuation is “a recognition” of the hard work his team members have put in over the past eight years or so.

It’s also “a testament to our mission or creating as many quality employment opportunities as possible”, he said.

Employment Hero’s focus has always been on helping ‘democratise the talent pool’ for SMEs. Small businesses represent some 99% of all businesses, globally, and hire about 70% of all employees, he added.

“But most business owners still feel anxious, under qualified and under-resourced as employers.”

Speaking to SmartCompany in 2021, Thompson explained that Employment Hero has been able to hire overseas teams without stepping foot out of the country. His plan was to make that a possibility for other businesses too, regardless of their size.

“Geographical barriers have been a fundamental constraint to employment, and solving this challenge is a major strategic advantage that will undoubtedly help businesses to grow and scale.”

At that time, the founder had his eye on global growth for Employment Hero, too.

The goal is to be “the number one platform for finding, managing and motivating employees, regardless of geography”, he said.

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