Zenefits Secures $66.5 Million Series B from Andreessen.
Silicon Valley Venture Capital firm Andreessen Horowitz has placed a sizable amount that startup Zenefits would become one of the fastest-growing and biggest cloud software company the tech industry has ever seen.
“Those are really big statements, but that’s what we’ve seen,” said Lars Dalgaard, general partner at Andreessen Horowitz and a Zenefits board member.
Zenefits has manage to raise a total of $84 million and gained the backing of some important investors and celebrities which including the actor Jared Leto, and sailed past investor expectation during a year after it launched its software-as-a-service platform that helps businesses manage human resources service. During Tuesday, the startup announced that Andreessen Horowits had, for the second time during the past four months led a million dollar investment. The $66.5 million funding round follows along with a $15 million round that Andreessen led during January.
“It’s extremely unusual,” Dalgaard said. “It’s like a Halley’s comet event for us.”
Dalgaard said valley investors are combating for a piece of this upcoming company, which hopes to take the throne away from Workday, a Pleasanton-based software service to manage human resources as big companies, as the main top of the cloud enterprise sector.
Zenefits is rapidly growing around 30 percent month-over-month since its launching back in 2013, by comparison venture capitalist generally look for company’s to grow about 30 percent year-over-year before they are considered healthy enough to go public. Zenefits isnt’ prepared for an IPO, stated co-founder and CEO Parker Conrad, but the company is currently on track towards growing over 1,300 percent during 2014 over 2013, and from April to May the company’s revenue was over five times greater than previously predicted.
“I’m focused 100 percent on growing the business and making a dent in the universe with this stuff,” Conrad said.
Some VC stated Zenefits as an example of the new generation of cloud application that are developing technology for mobile devices and could make companies such as Salesforce.com, a pioneer of cloud software for business, obsolete. Employees with Zenefits, for instance, can track their pay and health benefits from their mobile devices..
“The first phase (of cloud) was Salesforce,” said Scott Sandell, chairman of the National Venture Capital Association. Now “we’re seeing lots of things that just weren’t possible before, and it’s because of mobile.”
Based in San Francisco’s SoMA neighborhood, Zenefits offers its software free to businesses, which use the platform to manage their employees payroll and benefits. Zenefits makes money by acting as the insurance broker between companies and their health care providers, such as Kaiser Permanente or Blue Cross Blue Shield. The health care provider pay Zenefits a broker fee.