Hibob, an HR and employee benefits platform for small to medium-sized businesses, has raised $17.5 million in Series A funding. Leading the round is U.S. VC firm Battery Ventures, with participation from Arbor Ventures, and Fidelity’s Eight Roads Ventures. Existing backer Bessemer Venture Partners also joined the round, which brings total funding for the U.K. and Israel-based startup to $25 million.
Launched last year, Hibob has built what it describes as a cloud-based HR and benefits platform to help businesses manage and engage with their employees. The software includes all of the day-to-day HR admin tools you’d expect, but also places a lot more emphasis on employee engagement, with a bottom up approach to the formation and support of employee ‘clubs’ or interest groups.
This lets employees declare and view each other’s interests and start new groups of their own, which are visible and can then be more formally supported by the business owner or its HR department.
In addition, and important to its business model, Hibob offers a growing marketplace of employee benefits, such as pension enrolment, healthcare and so on. Regards the former, it recently announced a partnership with leading U.K. insurance company Aviva to offer workplace pension schemes.
This is part of Aviva’s digital transformation strategy and, I’m told, its ambition to target the SME sector in a more scalable way. Hibob co-founder and CEO Ronni Zehavi told me in a call that this means companies can ‘auto-enrol’ new employees into a mandatory workplace pension scheme in as little as 15 minutes and entirely digitally.
The bigger picture is that by keeping employees more engaged and supported at work, including outside of work hours, they become more invested in the workplace and are likely to stick around longer. Employee retention, especially as so-called millennials increasingly make up more of the workforce, is what keeps business owners awake at night, says Zehavi.
Meanwhile, that a major U.S.-based VC led Hibob’s latest round is noteworthy. The startup says it plans to use the new capital to further develop the technology behind its HR and employee benefits platform, build additional benefit partnerships (think health providers, insurance companies and financial services) and to increase its sales capacity. It also plans to expand its operations globally by the end of 2017, and Zehavi tells me this will include the U.S. and Asia-Pacific.
“HR is evolving from a compliance-only function to a strategic business role” said Scott Tobin, General Partner at Battery Ventures, in a statement. “It needs to be able to consolidate and simplify its administrative responsibilities so that it can be freed up to convert the energy and passion that young people arrive with into long-term engagement. We believe hibob’s highly experienced team has an intrinsic understanding of how to address these core issues that businesses must solve.”