Zenefits, a 2-Year-Old Startup, Is Now Valued at $4.5 Billion The San Francisco startup offers free HR software to small and medium-sized businesses, and makes money by collecting commissions from benefits providers.
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Following a seismic $500 million funding round a mere two years after being founded, San Francisco software startup Zenefits has now zoomed into the billion-dollar valuation club, clocking in at $4.5 billion.
Launched in April 2013, Zenefits offers small and medium-sized business owners software to manage their HR needs, including payroll and health insurance. What differentiates the company from competitors is that it gives businesses this platform for free and instead generates revenue by collecting commissions from health care providers.
Zenefits' Series C round was led by Fidelity and TPG, while bold-faced investors like Ashton Kutcher, Guy Oseary and Jared Leto -- a previous investor -- also participated.
All told, Zenefits, which counts 1,000 total employees and says it expects to reach an annual run rate of $100 million by 2016, has raised $584 million in venture capital. Funds will be allocated towards bolstering its sales and marketing teams to build upon the 10,000 businesses Zenefits already services across 48 states, the company said.
"In my experience, the momentum that Zenefits has achieved in two years is unprecedented," said Lars Dalgaard, a general partner at Andreessen Horowitz, in a statement. Zenefits marks Andreessen Horowitz's biggest investment to date.
Zenefits was founded by tech wiz Laks Srini and the serial entrepreneur Parker Conrad, who previously founded SigFig, an online wealth management tool.