ZenPayroll has raised $60 million from some of Silicon Valley’s top investing firms, marking rapid growth for the two-year-old startup that is already outpacing larger software competitors.
San Francisco-based ZenPayroll — one of a handful of tech startups that have adopted the word “zen” into its name — announced the Series B funding on Monday. The $60 million round, which puts ZenPayroll at a $500 million valuation, was led by Google Capital — the growth equity fund backed by Google — with participation from Emergence Capital Partners, Ribbit Capital General Catalyst, Kleiner Perkins Caufield & Byers and Google Ventures.
The round — the company’s largest yet — brings ZenPayroll’s total funding to date to $86.1 million. But fundraising is not a primary area of focus — by the time ZenPayroll raised that $60 million, it still had about $17 million left in its bank account.
ZenPayroll announced in February it hit a milestone of 10,000 active customers, signaling one of the fastest growth rates among companies selling software to small- and medium-size businesses. The company sells comprehensive payroll service software that businesses can run on any web-enabled device, including a smartphone. The software automatically processes government payroll taxes and reporting. The goal, according to the company, is to give small business owners who are processing payroll by hand more time to dedicate to building their company, rather than fumbling with burdensome paperwork.
About 40 percent of small businesses still complete their payroll by hand; as a result, there are lots of errors in that paperwork: One-third of the six million companies in the U.S. that have employees and pay them are fined every year for errors in payroll. Because ZenPayroll handles all local, state and federal taxes, employers are less at risk of facing penalties if they use the software, the company says.
ZenPayroll, the brainchild of Stanford University students and led by CEO Josh Reeves, was founded in late 2012 and initially focused on serving tech companies. It now has customers in 47 states and plans to have a presence in all 50 by the end of the year.
Photo courtesy ZenPayroll
