Workplace solutions provider, Employment Innovations recently secured USD$4 million (AUD$5.1 million) in debt funding from Partners for Growth, an investment partner for Silicon Valley Bank, in San Francisco.
The funding will support the company’s plan to improve how businesses manage recruitment, HR and payroll via its cloud-based employment management platform, Employment Hero.
The Sydney-based company, which has been in business for over two decades now, launched Employment Hero in the Australian market back in early 2014 and then later on added free unlimited online job advertising, career pages and paperless employee onboarding in December.
This introduction of free components has turned out particularly popular with businesses in the retail and hospitality spaces. For the past few months, Employment Hero has been adding around 50 Aussie businesses per day and is now on track to exceed 15,000 customers this calendar year.
This powerful cloud-based employment management solution also got Employment Innovations into the top 10 of BRW’s Most Innovative Companies list for 2014.
Pumping more gas into Employment Hero’s tank
Employment Innovations CEO, Ben Thompson (pictured above) said the immediate success of Employment Hero at the tail end of 2014, and this recent boost in funding, reinforces his company’s vision to take people management and payroll management into the cloud.
“We are set to transform the management of recruitment, employment and payroll in the cloud for businesses,” he said. “This investment will further position Employment Hero to become Australia’s largest employment management platform.”
Thompson further remarked that seeing how quickly Australian businesses are converting to cloud accounting software, Employment Innovations expects this trend to flow through to employment management and advance payroll software this year.
In 2015, Employment Innovations plans to utilise this funding it has raised to establish a 15-person national sales team for Employment Hero, develop more recruitment and HR tools for the platform and progress the development of its mobile apps, both for Apple and Android.
What else will Employment Innovations use this funding for?
The company has been growing its employee and partner rewards platform, Power2Motivate, throughout the Asia Pacific region over the last seven years.
So the funding will also be used to support the continued expansion of Power2Motivate into the Asian and European markets, as well as expand Employment Innovations’ professional services in employment law, industry relations, migration, and HR consulting.
Furthermore, with offices in most Australian capital cities, as well as Singapore, the funding will also accelerate Employment Innovations’ expansion in 2015 with new offices in London and Europe.
Why did Employment Innovations get the funding from the US?
Lastly, on why Employment Innovations chose to get the funding from Partners for Growth in particular, Thompson revealed to Anthill that although there were other funding options available, such as some private equity enquiries, he didn’t want to dilute ownership.
“We looked at the options and Australia didn’t really offer us a debt-funding round,” he said about his company’s decision to secure funding from the other side of the Pacific.
“What we have decided to do is use this hybrid debt round, which involves a very small equity component of one per cent to two per cent and the debt at a reasonable interest rate, comparable to say a convertible note in Australia,” he explained.
“To me it looks like this kind of flexible funding structure is really missing in Australia.”