A year of growth: These HR firms secured major funding in 2023

After experiencing significant growth driven by a funding frenzy over the past three years, Indian businesses are now facing a reality check. Funding levels have dropped to those witnessed in 2020, creating uncertainty in markets and triggering concerns of a potential economic downturn in the US, reminiscent of the 2008 Global Financial Crisis. 

Despite these challenges, the current period presents a promising opportunity to establish an HR firm, albeit with investors exercising a more cautious funding approach. While we delve into the reasons behind this shift in a separate report, let's explore the list of HR companies that have effectively raised substantial capital in 2023. This list highlights their resilience and potential during these trying times.

HR firms secure big funding in 2023

1. Jellybean - $350K

Jellybean, a startup focusing on employee benefits and rewards management, secured $350K in a pre-seed funding round led by Paradigm Shift Capital and Sunn91 Ventures. Additional investors include MarsShot Ventures, Vaibhav Vardhan, Saurabh Nigam, and Sumanth Narayanan. These funds will be utilized to enhance the product and introduce new offerings. Jellybean's goal is to make employee benefits more personalized and inclusive using AI while providing flexibility and customization options. 

Their marketplace offers a wide array of benefits spanning health, fitness, mental wellness, learning and development, lifestyle and entertainment, food and beverage, commute, and pet care. The praised customizable and user-friendly experience provided by Jellybean aligns with the growing demand for meaningful benefits that attract and retain talent, as acknowledged by both investors and industry experts.

2. MyWays.ai - $107.5 

The HR tech startup, My Ways.ai, secured a $107,500 investment in a Seed funding round. The round was led by Realtime Angel Fund (RTAF), an angel fund registered with SEBI and known for its early-stage startup investments. As per an official statement from the company, this investment expanded MyWays.ai's user base and extended its offerings to become a comprehensive software solution with dedicated services. 

Fueled by advanced AI technology, MyWays.ai streamlined and automated the entire recruitment process, encompassing talent discovery, screening, interviews, and training. This enabled organizations to make informed decisions efficiently, reducing manual efforts by up to 90%. At that time, the company claimed to have a network of over 110,000 candidates across 800 colleges, with more than 150 companies as clients.

3. Alfii - $2.5 M

Dubai-based Alfii had secured pre-seed funding of $2.5 million (approximately Rs 20 crore), with the leading investment coming from US-based Preface Ventures. Other participants in the round included Kayan Ventures, Aditum Ventures, and Wayfinders, in addition to a group of local and regional angel investors. The startup had planned to utilize this capital to expand its team and enhance its product offerings. 

Established in 2022 by Yousef Albarqawi, Becky Jefferies, and Dina Mohammad-Laity, Alfii was a cloud-based HR platform aiming to assist businesses in managing their HR workload and optimizing administrative tasks such as employee data and payroll. Since its launch, Alfii had onboarded over 250 businesses, serving clients spread across the UAE, Saudi Arabia, and Egypt.

4. Nomu Group - $5 M

Saudi Arabia-based Nomu Group had raised seed funding of $5 million (approximately Rs 40 crore) from DIV Capital and Shurfah to support its geographical expansion and broaden its business-to-business product offerings. In addition to DIV Capital and Shurfah, Core Vision and Purity for Information Technology, alongside family offices in Saudi Arabia like the Altoukhi family office and Bakr family office, and several angel investors, had also taken part in the fundraise. 

Established in 2022 by Salman Attieh, Yassir El Ismaili El Idrissi, Shehab Mokhtar, and Ahmed Eldemerdash, Nomu came into being through the merger of two foodtech e-grocery startups: Saudi-based Jumlaty and Egypt-based Appetito. The funding obtained was slated for the expansion of operations into the hotel, restaurant, and catering (HoReCa) sector, in addition to the development of a software-as-a-service (SaaS) solution and an AI-enabled procurement chatbot. 

Nomu had planned to scale its business to 50 cities by 2025, including coverage of Pakistan and key sub-Saharan countries in the near future. At that time, Nomu was operational in four countries: Saudi Arabia, Egypt, Tunisia, and Morocco.

5. Heynannyly - $1.77 M

Heynannyly, a B2B HR tech startup, secured $1.77 million in funding during an oversubscribed seed round. The co-founders, Anna Schneider and Julia Kahle, had developed a nanny portal addressing the challenge of balancing work and family life. Being based in Munich, Heynannyly provided companies with an HR dashboard that enabled them to financially subsidize childcare hours, thereby supporting work-family compatibility. 

Previously, the administrative complexities involved in accessing this $663 USD per employee per year benefit had prevented its utilization. Heynannyly had managed to attract a diverse group of investors, including HR Tech VC allygatr, as well as eight business angels such as Dr. Marco Adelt (Co-Founder and Board Member of CLARK) and Dr. Elke Eller (former HR Director of VW and TUI). Additional investors included Olav Sehlbach, Cornelia Hoppe, Dr. Jens Wehrmann, Maren Wagener, Matthias Knälmann, and Dirk Bruckmann.

6. Rippling - $500 M

The HR and payment software startup Rippling secured $500 million in a recent funding round initially aimed at assisting customers in processing payroll following Silicon Valley Bank's collapse. The funding round was led by technology investor Greenoaks Capital, resulting in Rippling maintaining the same valuation of $11.25 billion achieved during its prior capital raise last year, as stated by the company. 

After discovering that some of its clients' payroll funds were trapped at SVB, Rippling's Chief Executive, Parker Conrad, decided to utilise $130 million from the San Francisco-based company's own balance sheet to ensure timely payroll processing. As it remained unclear whether customers' funds would be recovered by Monday, Conrad began seeking additional capital from investors, whose funds were also partially affected by the situation at SVB.

7. HiBob - $150 M

HiBob, a New York-based HR platform provider, secured an additional $150 million in funding. The funding round, bringing the total to $574 million, was spearheaded by Farallon Capital and saw participation from Alpha Wave Global and existing investors. The company's plans for these funds involve accelerating investment in product innovation and development, expanding into new regions, and efficiently catering to enterprise-scale customers as it continues to expand its market presence worldwide. 

Under the leadership of CEO Ronni Zehavi, HiBob offers a modular HR product suite named Bob, designed to meet the needs of multinational companies seeking agile technology and analytics to support their operations across distributed workforces in the contemporary business landscape.

8. Zelt - $3.5M

HR startup Zelt secured $3.5 million (€3.13 million) in seed funding from investors such as Episode 1 Ventures, Village Global, and notable angels like Charlie Songhurst, Mandeep Singh, Felix Leuschner, and Daniel Hegarty. The UK-based startup, specializing in IT and payroll automation, utilized the recent funding to strengthen marketing initiatives and address the increasing demands of a larger and more global customer base.

9. One Model - $41M

One Model, a platform utilising AI to aid employers in decisions regarding recruiting, hiring, promotions, layoffs, and workplace planning, had announced a funding round that raised $41 million. Riverwood Capital led this funding round. Christopher Butler, the CEO of One Model, had mentioned that the capital would be directed towards "boosting several of the company’s growth initiatives," especially focusing on technology, product development, customer success, and go-to-market strategies.

10. Finch - $40M

HR and payroll fintech startup, Finch, raised an additional US$40 million in funding, marking its second series venture round in under a year. This comes just eight months after closing a US$15 million Series A funding round. The recent funding round, which elevated Finch's total funding to nearly US$60 million, was spearheaded by existing investors General Catalyst and Menlo Ventures. QED Investors, Altman Capital, and PruVen Capital also joined the round. 

Finch aims to utilise this capital for broadening coverage across various payroll, HR, and benefits systems. Additionally, they planned to expand into new employment data verticals, particularly focusing on benefits administration. Incorporating new functionality, like automating payroll operations, was also a key objective. Founded in 2020, the company intended to grow its engineering, product, and market success teams to meet the escalating demand for the Finch platform.

11. Darwinbox - Undisclosed

Microsoft had invested in Hyderabad-based human resources software company Darwinbox, reflecting the increasing interest among corporate clients to enhance talent retention strategies. The US-based tech giant made an equity investment, the exact amount of which remains undisclosed. This investment came as an extension of Darwinbox's Series D round, valuing the company at over $1 billion in early 2022, as stated by the startup in a January 17 announcement. In line with this collaboration, Darwinbox had chosen to leverage Microsoft Azure for its human capital management SaaS (software-as-a-service) platform, according to a report by VCCircle.

12. Propel - $2.74M

Nigerian HR tech startup, Propel, secured $2.74 million (€2.5 million) in seed funding, aiming to accelerate the adoption and rollout of its community-as-a-service platform. The funding round was spearheaded by No Such Ventures, with additional contributions from APX, Golden Egg Check, and Future of Learning Fund. Established in 2020 by Sunkanmi Ola, Seun Owolabi, and Abel Agoi, Propel was focused on aiding multinational corporations in mitigating the risk associated with hiring remote workers from emerging markets, particularly Africa. The startup operated on a community-based model, recognising the significance of communities as fundamental elements within tech ecosystems, especially those in emerging markets.

13. Sprout Solutions - $10.7M

Philippine HR technology platform Sprout Solutions had secured $10.7 million in Series B funding from seven prominent global venture capital firms. The round was spearheaded by Cercano Management, with involvement from SoftBank Ventures Asia, AFG Partners, GSR Ventures, Integra Partners, ACA Investments, and Mynavi Corp. The successful Series B round had brought the total investment in Sprout to date to $18.3 million. Additionally, this marked the inaugural investment by Cercano, SoftBank Ventures Asia, GSR Ventures, ACA Investments, and Mynavi Corp. in a Philippines-based company.

14. Palm.hr - $5M

Palm.hr, a Saudi-based HR-tech startup founded by Richard Schrems, Christoph Czichna, and Dragan Nikolic, had raised $5 million in a pre-Series A funding round led by Europe-based VC Speedinvest and RAED Ventures, with participation from Wamda Capital. Palm.hr provided a mobile-first solution to automate payrolls, track employee absences, monitor staff performance, and streamline internal communication. 

Headquartered in Riyadh, Palm.hr had a number of high-profile clients, including Hala, Thmanyah, and Mozn. The company also integrated with government services, such as the General Organization for Social Insurance and Muqeem, to make it easier for employees to process payroll, apply for visas, and update their social insurance.

15. HR Duo – $5.1 M

Dunshaughlin-based HR Duo raised $5.1 million in a Series A funding round, which drove revenue growth and supported international expansion. The round was led by UK-based Puma Private Equity, a move that the Irish company mentioned supported its UK growth, in particular. Previous investors in the company’s seed round, including Alan Merriman of Elkstone and Joe Hogan of Openet, also participated. 

The human resources technology company, founded two years ago, integrated industry knowledge with technology to automate HR requirements and offer a low-cost option to small and medium-sized businesses. Jerome Forde, chief executive of HR Duo, welcomed the new funding, stating that Puma not only provided the necessary funding but also the expertise to help drive its growth.

16. Employment Hero- $167 M

Employment Hero, an HR tech startup originating from Sydney, Australia, has secured an impressive $167 million in a rare late-stage funding round, experiencing a heightened valuation thanks to TCV, a supporter of Airbnb. Since its inception in 2014, the company has catered to about 300,000 SMEs globally, offering a suite of services including employee onboarding, HR, payroll, and employee benefits. A portion of the newly acquired funds will fuel the expansion of its operations in the UK and South East Asia.

This substantial surge in funding arrives amidst a subdued venture capital market for startups. The company's valuation soared to $1.2 billion following this deal, marking a notable increase from its previous $800 million valuation.

To share information about funding, policies or other workforce-related changes, send us an email at samriddhi.s@gopeoplematters.com. We welcome your insights and contributions to our reporting.