Zenefits was founded to help companies manage all their human resources needs on its cloud-based HR portal. Today, its platform will make it even more attractive for startups to entice employees with stock options, by offering a feature that makes it easier to keep track of those options it gives out.
Since opening for business a little more than a year ago, Zenefits has rapidly expanded due to its easy-to-use platform for HR management. The company provides a portal that clients can use to deal with all the worst parts about HR all in one place, including things like payroll, benefits, health insurance, and employee on-boarding and even termination (when it comes to that).
With stock options, Zenefits is seeking to solve a problem that a number of startups are faced with. Up until now, tracking option grants and vesting schedules has mostly been a manual process — and one that only gets more difficult as companies scale up over time.
Zenefits is seeking to eliminate some of the hassle, by building stock options directly into its HR platform and supporting a number of time- and cost-saving features related to their management.
With the new feature, clients will be able to keep track of the grants they give out, as well as the vesting schedule for all employees in the company. Meanwhile, their employees will be able to monitor their own vesting schedules and exercise stock options in real-time.
That provides more transparency to both employer and employee, while also dramatically reducing costs associated with stock option management. The feature costs just $5 per month for each option-holding employee on the platform.
That makes stock options its first real premium option for clients. Outside of that, Zenefits will remain free to use for companies that sign up for its SaaS platform. Otherwise, it makes money as an insurance broker for those that wish to use that service.
Zenefits isn’t the only company looking to simplify the process of keeping track of stock option grants, vesting schedules, and amount exercised. Startup eShares is also seeking to provide a platform for managing equity and cap tables.
The difference, of course, is that Zenefits has more than 2,000 companies and 50,000 employees on its platform. Offering up a way for those employees (and their employers) to have access to their stock options on the same site, as opposed to a different portal, makes a ton of sense.
In just the last year, Zenefits has seen explosive growth on its platform, and expects even more in the coming months. At the time the company participated in the Startup Battlefield Finals at TechCrunch Disrupt NY last year, it had six employees. Since then, it’s grown headcount to more than 180.
With such explosive growth, the company has also raised a significant amount of capital, bringing in more than $80 million in funding from investors that include Andreessen Horowitz, Institutional Venture Partners, SV Angel, Hydrazine Capital, Elad Gil, and Jared Leto.