Zenefits, the one-year-old cloud software startup that is aiming to upend the health insurance business, nabbed longtime tech executive David Sacks to join its top ranks.
San Francisco-based Zenefits announced Wednesday that Sacks, the founder of enterprise social networking company Yammer and one of the early executive leaders of PayPal, will become its new chief operating officer.
David is widely acknowledged as one of the best leaders and managers in tech, said Zenefits chief executive and co-founder Parker Conrad. He added that Sacks was on the front-lines tackling the challenges of hyper-growth at PayPal.
The hire is notable for the startup, which is widely considered the fastest-growing software company on the planet. In the last year, Zenefits has morphed from a skeletal 15 employees into an army of nearly 500 and counting — its revenue growth outpacing that of many valley software giants. The high-tech startup makes software for businesses to manage employee benefits, but the twist — and the source of its revenue — is that Zenefits is also a health insurance broker, working as the middleman between businesses and health care providers such as Anthem Blue Cross. It gets paid a broker fee for each transaction.
In August, Zenefits made about $1.5 million in new business, its best month ever. In October, that number more than doubled. By the end of this year, its revenue will likely have grown 20 times greater than in 2013, although it is not profitable. This month, Zenefits opened a new office in Arizona to house 1,300 employees, more than tripling its San Francisco workforce.
I have never seen a software-as-a-service company grow its revenue this fast, Sacks said in a prepared statement. By comparison, it took Yammer three years to achieve what Zenefits has done in one. Zenefits has reset all the benchmarks.
Sacks sold Yammer to Microsoft in 2012 for $1.2 billion. Before that, he secured his place in Silicon Valley history as part of the PayPal mafia, and that company was sold to eBay in 2002 for $1.5 billion.
Photo: Zenefits CEO Parker Conrad speaks at his office in San Francisco, Calif., Wednesday morning, Oct. 22, 2014. Karl Mondon/Bay Area News Group.
