[UK] Tiger Global and Avid Ventures lead $35m investment in London payroll solution

Managing payroll can be one of the greatest challenges for any business, especially SMEs. Pento is a startup that has built payroll automation software to make the process go more smoothly and now it has raised $35 million in a Series B round of funding co-led by Tiger Global Management and Avid Ventures, Tech Crunch reports.

The investment is Tiger Global’s first in London-based Pento. Avid has invested previously, along with other existing backers General Catalyst, Seedcamp and LocalGlobe. This funding round comes just six months after the startup raised a $15.6 million Series A led by General Catalyst. 

The company has not revealed the valuation at which either round was raised, saying only that its current valuation is “a meaningful step up” from its Series A. 

Founded by Jonas Bøgh Larsen and Emil Hagbarth Rasmussen in 2017, Pento has reportedly raised $53.4 million since its inception. The startup’s stated mission is to help free up companies from “onerous spreadsheets outsourcing and outdated software.” Pento says its SaaS offering fully automates the payroll process so that payroll managers and finance teams are not reliant on spreadsheets, PDFs, e-mails and manual checks. 

It claims to reduce the amount of time its customers spend on payroll by up to 80 per cent by giving them “more control and visibility” over their monthly pay run. It does this by automating everything from tax calculations to payments to reporting requirements so that businesses of any size “can run their payroll in minutes instead of days.”

CEO and co-founder Bøgh Larsen said that over the past year, Pento has seen its revenue climb “10x.” The company said it has seen “consecutive record-breaking months of growth” since its Series A. In addition, it has added several “major” new customers, including Britain’s Starling Bank, as well as integrations with partners such as Personio, Hibob and BambooHR. Other customers include tech startups Pleo and Cuvva as well as Honest Burgers and Beauty Pie. 

Pento works with hundreds of SMEs and mid-sized businesses with 30 to 500 employees and is now serving larger enterprises with around 2,000 employees. 

With its SaaS model, the company makes money by charging customers a set monthly fee. 

With plans to expand internationally in the future, Pento is focused on its home market of the UK and Europe for now. It says that payroll outsourcing is a nearly $6 billion market and one that is expected to grow at an annual rate of 4.4 per cent. 

In the U.K. alone, there are an estimated 20,000 small and medium-sized businesses and 4,000 mid-market businesses that are potential customers, it says.

“This represents an opportunity to transform payroll automation for nearly 10 million employees within the U.K. alone and a $1+ billion annual revenue opportunity,” Bøgh Larsen said.

Pento plans to use its new capital in part to expand into new European countries and toward product development, service expansion and partner integrations. It also continues to bring on new hires. The company has already grown its team to 70 employees, up from 20 a year ago.

In addition to its SaaS offering, Pento provides infrastructure through its partnerships and integrations with existing accounting software, HR products and pension providers. It has also developed an open payroll API that is currently in beta, with the aim of allowing any business to build custom integrations to automate more of their workflows, such as time-tracking or shift planning. That API will also allow employees to share pay and compensation data with third-party apps and services to validate their income to credit agencies, as well as other financial and HR organisations, the company said.

“We built Pento having seen firsthand just how broken the current payroll processes are, and our continued success showcases just how strongly forward-thinking companies are asking for tools to fix this,” Bøgh Larsen said.

Source: Tech Crunch

(Quotes and link via original reporting)

Managing payroll can be one of the greatest challenges for any business, especially SMEs. Pento is a startup that has built payroll automation software to make the process go more smoothly and now it has raised $35 million in a Series B round of funding co-led by Tiger Global Management and Avid Ventures, Tech Crunch reports.

The investment is Tiger Global’s first in London-based Pento. Avid has invested previously, along with other existing backers General Catalyst, Seedcamp and LocalGlobe. This funding round comes just six months after the startup raised a $15.6 million Series A led by General Catalyst. 

The company has not revealed the valuation at which either round was raised, saying only that its current valuation is “a meaningful step up” from its Series A. 

Founded by Jonas Bøgh Larsen and Emil Hagbarth Rasmussen in 2017, Pento has reportedly raised $53.4 million since its inception. The startup’s stated mission is to help free up companies from “onerous spreadsheets outsourcing and outdated software.” Pento says its SaaS offering fully automates the payroll process so that payroll managers and finance teams are not reliant on spreadsheets, PDFs, e-mails and manual checks. 

It claims to reduce the amount of time its customers spend on payroll by up to 80 per cent by giving them “more control and visibility” over their monthly pay run. It does this by automating everything from tax calculations to payments to reporting requirements so that businesses of any size “can run their payroll in minutes instead of days.”

CEO and co-founder Bøgh Larsen said that over the past year, Pento has seen its revenue climb “10x.” The company said it has seen “consecutive record-breaking months of growth” since its Series A. In addition, it has added several “major” new customers, including Britain’s Starling Bank, as well as integrations with partners such as Personio, Hibob and BambooHR. Other customers include tech startups Pleo and Cuvva as well as Honest Burgers and Beauty Pie. 

Pento works with hundreds of SMEs and mid-sized businesses with 30 to 500 employees and is now serving larger enterprises with around 2,000 employees. 

With its SaaS model, the company makes money by charging customers a set monthly fee. 

With plans to expand internationally in the future, Pento is focused on its home market of the UK and Europe for now. It says that payroll outsourcing is a nearly $6 billion market and one that is expected to grow at an annual rate of 4.4 per cent. 

In the U.K. alone, there are an estimated 20,000 small and medium-sized businesses and 4,000 mid-market businesses that are potential customers, it says.

“This represents an opportunity to transform payroll automation for nearly 10 million employees within the U.K. alone and a $1+ billion annual revenue opportunity,” Bøgh Larsen said.

Pento plans to use its new capital in part to expand into new European countries and toward product development, service expansion and partner integrations. It also continues to bring on new hires. The company has already grown its team to 70 employees, up from 20 a year ago.

In addition to its SaaS offering, Pento provides infrastructure through its partnerships and integrations with existing accounting software, HR products and pension providers. It has also developed an open payroll API that is currently in beta, with the aim of allowing any business to build custom integrations to automate more of their workflows, such as time-tracking or shift planning. That API will also allow employees to share pay and compensation data with third-party apps and services to validate their income to credit agencies, as well as other financial and HR organisations, the company said.

“We built Pento having seen firsthand just how broken the current payroll processes are, and our continued success showcases just how strongly forward-thinking companies are asking for tools to fix this,” Bøgh Larsen said.

Source: Tech Crunch

(Quotes and link via original reporting)