SmartHR, a cloud-based human resources and labour- management software startup, has secured $140 million in a Series E funding round. The news was announced on 1 July, 2024.
The round was led by KKR and Teachers’ Ventures Growth, an investment arm of Ontario Teachers’ Pension Plan, with participation from existing investors. This comes three years after SmartHR’s $142.5 million Series D round, which valued the company at $1.6 billion.
Although the company declined to disclose its current valuation, SmartHR has seen significant demand for its SaaS platform, which helps enterprises streamline human resources and operations. The company’s annual recurring revenue (ARR) reached $100 million as of February 2024, up from $80 million in total revenue for FY 2023.
SmartHR’s new funding will support the development of new solutions, hiring, and both organic and inorganic growth strategies, including potential mergers and acquisitions.
The growth in SmartHR’s ARR reflects the increasing global demand for HR technology. Comparable US-based companies such as Rippling, Gusto and Deel have also reported substantial revenue growth, with ARR figures of $350 million, $500 million and over $500 million, respectively.
The company, co-founded in 2015 by Kensuke Naito and Shoji Miyata, currently employs about 1,000 people. It aims to leverage its extensive employee data to rapidly deploy new products, distinguishing itself from other back-office software providers in Japan such as Works Human Intelligence, freee and Moneyforward.
The HR tech market is booming, projected to be worth $81.84 billion by 2032. Major players such as Rippling, Gusto, and Deel have collectively raised billions in venture capital, reflecting strong investor confidence in this sector.