Namely is one of those companies that enables the not-so-big guys to have the same benefits as the big guys.
In this case, literally.
Namely is the first complete, end-to-end HR software platform offering payroll, HR and benefits services to small- and mid-sized businesses that have traditionally been underserved in the market, as they’re often priced out of major software platforms. As everyone in the startup world knows, access is everything and Namely provides these businesses with access to an affordable, comprehensive solution that helps them effectively manage their human capital needs, all in one place.
Founder and CEO Matt Straz tells us more about the service, the benefits, the details of their latest $11M venture round – and why designers are in such high demand these days.
Who were your investors and how much did you raise?
This $11 million investment was led by Matrix Partners, with additional funding from True Ventures, LererHippeau Ventures, Greenspring Global Partners and Vayner/RSE. The capital came as a follow-on to our $12 million Series B round at the end of 2014, bringing our total amount raised in the last nine months alone to $27.7 million.
Tell us about your product or service.
Namely is the leading HR software platform for fast-growing small- and mid-sized companies, and the very first comprehensive solution allowing them to manage all of their payroll, HR and benefits needs on one easy-to-use platform. At Namely, we believe that having great people is what drives businesses’ success. We’re proud to provide our clients with a modern, intuitive HR solutionfor handling all of their human capital needs,so that they can concentrate on progressing their businesses. This includes basic HR components (performance management, employee engagement and recruitment), payroll, and benefits (we offer medical, dental, life, and many more ancillary benefits from the world’s leading carriers).
What inspired you to start the company?
In 2012, we started Namely with one core mission: to streamline HR functions so that growing companies can focus on what they do best: build their businesses. This mission inspired us to create the best suite of modern HR tools on the market in order to help companies more easily and effectively manage their most valuable asset, and the most critical element to their success – their people.
How is it different?
Namely is the first complete, end-to-end HR software platform offering payroll, HR and benefits services to small- and mid-sized businesses. These companies have traditionally been underserved in the market, as they’re often priced out of major software platforms. Namely, however, providesthese businesseswith access to an affordable, comprehensive solution that helps them effectively manage their human capital needs, all in one place.
What market you are targeting and how big is it?
Namely primarily serves companies with 20 to 1,000 employees. Today, we work with more than 200 of the world’s most exciting companies in 20 countries, serving more than 30,000 employees. And we’re continuing to expand rapidly – in 2014 alone, we grew our client base by 400 percent.
Which are the most popular positions that companies are hiring for these days?
This won’t be a big surprise – it’s developers.
What’s more interesting is that designers are right up there, too. Companies like Uber have raised the bar on what’s a great user experience. We’re seeing companies – both B2B and B2C – invest in design to provide the quality experience that today’s users expect.
What’s your business model?
We sell an all-in-one HR software platform and charge a monthly subscription fee. Our main focus is the SMB market: We offer all of the HR functionality that SMBs need to grow their businesses at a much more affordable cost than enterprise solutions.
In addition to HR, payroll, and talent management, we just launched our benefits offering, which we’re really excited about. With benefits, we’ll be able to provide even more value for our clients, and we can access insurance commissions as a new revenue stream for the company.
What was the funding process like?
Though raising funding can be pretty hectic, this round was actually kind of fun. We received multiplepreemptive offers to lead a Series C, but we decided to take an additional inside round from our current investors and put off a Series C for now.
What are the biggest challenges that you faced while raising capital?
For this round,it was deciding if we wanted to introduce another VC firm into the mix,right after we closed our Series B just 90 days ago. We met a lot of great firms, but ultimately we decided to keep things simple and continue working with our current partners.
What factors about your business led your investors to write the check?
2014 was a year of record growth for Namely. We saw a 700 percent increase in sales, a 400 percent increase in our client base, and we grew our headcount by 300 percent. Weexpanded our offering by adding payroll this summer, and raised $12 million in our Series B in November. We were excited to announce an $11 million follow-on from our investors, and to launch our new benefits offering, as we continue to grow and transform the HR space.
What are the milestones you plan to achieve in the next six months?
We’re really excited to roll out benefits. We are licensed to offer medical, dental, and ancillary benefits across the country, and we pair our benefits expertise with modern enrollment technology. Namely is now the first comprehensive HR software platform to also serve as a nationwide benefits broker. Small- and mid-sized businesses have traditionally been priced out of full-featured HR, payroll, and benefits software. No longer. Every company, regardless of its size, deserves the tools to scale a world-class team.
Beyond benefits, we have several additions and upgrades in the roadmap that you’ll see over the next six month.
And, I’m proud to say we just hired our 100th employee. Our goal is to be one of the largest New York tech employers in the next five years. To house our growing team, we will be moving into the former AT&T building on Broadway in the Financial District, which is a beautiful space!
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Always. Be. Raising. Not letting your startup run out of money is your most important job as a founder, so you need to be constantly in the market meeting with potential investors and telling your story. Most people will say no, so the only way to increase the odds of getting a yes is to keep networking and finding more people to talk to.
Where do you see the company going now over the near term?
We really love providing HR technology for growing companies. We believe that Namely is already the leading HR platform for small-and mid-sized companies, and as we continue to develop the platform, we’ll be able to serve these companies even more effectively.
According to US Census Data, there are 42 times more companies with 100 to 4,999 employees than there are companies with 5,000 or more employees. So it’s a huge market that we’ve only begun to penetrate. More importantly, it’s these growing companies that change the world in exciting ways, so we love working with them.
Name your favorite bar in NYC.
So many choices! The Wythe Hotel rooftop bar in Brooklyn has an incredible view of Manhattan.