It seems like only a few months ago, we sat down with Namely to discuss their most recent funding round. Well it was and since March of this year, the software platform that is streamlining payroll, benefits, and HR needs for small and midsized companies has managed to build enough traction to garner more investor interest – this time a $45M Series C round, led by Sand Hill powerhouse Sequoia.
Today, we sit down with Founder and CEO, Matt Straz to discuss the latest round and where Namely is headed with this fresh injection of capital in the company.
Who were your investors and how much did you raise?
This $45 million Series C was led by Sequoia, with additional funding from Matrix Partners, True Ventures, Lerer Hippeau Ventures, and Greenspring Global Partners. Namely has raised $77.8 million to date and increased its valuation 9x over the last 12 months.
Tell us about your product or service.
HR is the last facet of modern business to be transformed by technology, and Namely was launched to bring this much-needed technological reboot to an industry often associated with the antiquated and inefficient practices of the past.
We created a modern, comprehensive, user-friendly platform where companies can handle all of their human capital management needs in one place – and a platform that employees actually want to use. 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). Namely is creating the future of HR, one in which innovative companies provide an engaging environment for a new generation of employees.
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 industry’s only truly comprehensive solution where small- to mid-sized businesses can manage all of their HR, payroll, and benefits needs on one seamless, easy-to-use platform. Unlike other HR software companies, we do not have to integrate with external companies to provide our services – Namely users have one login, and can access everything they need right on our platform.
What market you are targeting and how big is it?
Namely primarily serves companies with 20 to 1,000 employees. 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.Today, we work with more than 250 of the world’s most exciting companies in 20 countries, serving more than 40,000 employees. And we’re continuing to expand rapidly – in 2014 alone, we grew our client base by 400 percent.
What’s the most popular time-off request?
We actually just created an infographic on the most popular time off requests collected on the Namely platform. The most popular request is for “pest control.” Check out some of the other fun insights here.
What’s your business model?
Namely is the HR software platform for small- to mid-sized fast-growing companies. We typically target companies with 20 to 2,000 employees – a huge segment of the market that has traditionally been underserved, as these companies have often been priced out of comprehensive HR solutions from large vendors. Because we are the first end-to-end HR solution to also act as a nationwide benefits broker we are able to provide even more value for our clients, and we can access insurance commissions as a new revenue stream for the company.
Our clients use Namely to handle all of their human capital management needs – including HR, payroll, and benefits – all on one seamless, easy to use platform.
You recently closed a round of funding. What was the funding process like, this time around?
Remarkable! In early May, I met with five firms in one day, most of them on Sand Hill Road. These were partner-level meetings with some of the most well known VC firms in the world. Compared to where we were three years ago, this fundraising process was extraordinary in terms of the quality of the conversations, the amounts being discussed, and the speed at which things moved.
While all of the firms were great, presenting to Sequoia was a special moment for me. To look across the conference room and see the “$10B+ club” of logos on the wall — Apple, Oracle, LinkedIn, and others — was an awesome experience. As an enterprise startup founded in New York City, I’ll never forget it.
What factors about your business led your investors to write the check so quickly?
Our sales have grown exponentially in the last year, and our investors also had great conversations with our clients. Ultimately, we are a very dedicated, passionate team addressing a huge market and I think every VC that we meet now appreciates that.
What are the milestones you plan to achieve in the next six months?
We have a lot of exciting milestones coming up. First off, we just announced the opening of our new San Francisco office. We are also moving our New York headquarters into a much larger space to accommodate our fast-growing company.
We also recently brought Debra Squyres on as Vice President of Client Services. Debra joins Namely this month after spending seven years at TriNet, where she was Executive Director of Human Capital Services. She will further strengthen Namely’s service capabilities as part of our commitment to providing both great software and great service for its clients.
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?
At Namely, we recognize that small and mid size businesses have limited HR resources and don’t have the same access to comprehensive HR solutions that larger companies enjoy. Therefore, our product roadmap is focused on creating the first and most robust HR, payroll, benefits, and talent management offering built for these organizations. In the near term, this includes the addition of comprehensive company-wide reporting, added features to foster employee engagement, and upgrades to existing features allowing Namely to further scale with growing companies.
Which is your favorite NY area beach?
Coney Island, of course!