In just six years, the software company Personio has become one of Europe’s most valuable start-ups, valued at US$6.3 billion.
But CEO Hanno Renner (Hanno Renner) remembers when the company was tight.
In an interview with CNBC, Renner recalled that before the first real funds were obtained, only 200 euros (226 US dollars) were left in the company’s bank account.
Renner co-founded Personio in Munich, Germany in 2015 Roman Schumacher, Arseniy Vershinin and Ignaz Forstmeier. The four met while studying at the Center for Digital Technology and Management, a joint institution of the two main academies in Munich.
The idea of Personio, who focuses on serving small and medium enterprises, came from hearing how a friend worked hard to manage the human resources process at the company where he was the chief technology officer because he did not have the necessary software.
Therefore, the four set out to create a solution. As students, they don’t have an office, so they work anywhere in the university where they can find space to build Personio’s first software product. They put all their savings together to help pay for the expenses.
Once they let customers pay for the first software, they will use the revenue to buy their first software license, rent out a small office space and hire a small number of employees.
Then, in July 2016, Personio raised 2.1 million euros in a seed round of financing. Investors included Global Founders Capital, which backed companies such as LinkedIn and Facebook, which recently changed its name to Meta.
Renner said that before Personio gets the first round of financing, the founders must ensure that they have paid any unpaid invoices, which he explained is a standard condition for fundraising transactions.
He said: “I still have a screenshot of that bank account: Before we received the first round of financing, we had 100 euros left in our bank account, which was 2 million euros. [euros] At that time, but until then how nervous we were managing, it was really interesting. “
Since then, Personio’s financial situation has changed dramatically. In the latest E round of financing announced in October, Personio raised US$270 million, valued at US$6.3 billion. This is a big leap for the company, valued at US$1.7 billion in the D round of investment in January.
Personio has now raised more than $500 million from investors in total.
Unlike the start-ups that just started in 2016, Personio stated that in the latest round of financing in January, it still has “a large reserve” when the company announced the latest round of financing last month.
The latest batch of funds is used to develop its latest category of software, called the automation of human workflow. This aims to eliminate software barriers between HR and other company departments, for example, if you need to complete various tasks in different parts of the enterprise when hiring employees.
Personio’s competitors include HR software startups such as Hibob, as well as larger incumbents such as SAP and Salesforce.
‘Not to be the boss’
Leading a multi-billion-dollar software business seems very different from Reina’s part-time job as a yacht captain during his college years.
Reina said he has always been passionate about sailing. As a college student, he could not pursue it as a hobby with his own money, so he decided to obtain his yacht master’s license. This allowed him to become a captain and get paid during the college holidays to drive a boat around the world, which also helped him fund his studies.
But this is not all fun and charm.Commanding a ship can be “fierce and [a] It’s harder work than most people think,” Reina said, because he is in charge of the crew and guests.
This level of responsibility in the leadership team does help him prepare for the role of CEO, because he recognizes the importance of accepting employee opinions.
However, for Renner, building a company “is not about being a boss or being someone’s boss,” he said, explaining that he wanted to encourage the “level of ownership” of Personio employees.
Reina said he wanted to ensure that employees “have the right to make the right decisions and act like entrepreneurs.”
Obviously, something is working, Personio now has more than 1,000 employees, and the number of employees in 2020 is 350.
— Ryan Browne of CNBC contributed to this story.
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