Payroll automation is not exactly the sexiest of startup areas but it’s a pretty decent business. The larger startup in the space is Payfit, which has raised upward of $208.4 million to do something that lots of companies find quite painful. But Payfit does a lot of other things as well, potentially leaving it exposed. Now a startup aims to come along and hone in on the thorny issue of payroll automation, alone.
Founded by Jonas Bøgh Larsen and Emil Hagbarth Rasmussen, Danish firm Pento has raised $15.6 million in a Series A funding led by General Catalyst. Also participating was Avid Ventures and the U.K.’s LocalGlobe. Existing investors Point Nine Capital, Moonfire Ventures, Hustle Fund and Seedcamp also took part, alongside angels (see below). This latest funding takes the total raised by Pento to $18.4 million.
The startup claims 700 companies are using it including tech firms Pleo and Cuvva; large hospitality brands (Honest Burgers); and retail and e-commerce brands (Lacoste, Beauty Pie). Pento replaces spreadsheets, etc. and gives them cloud-based tools, real-time calculations, transparency, and online and telephone support.
Pento co-founder and CEO Jonas Bøgh Larsen told me: “The biggest process we’re replacing is payroll outsourcing where companies are outsourcing payroll to an accountant, which the vast majority of companies do in Europe. We automate the entire process from reporting to tax calculations to payments. So, what most other platforms or payable products do is basically just helping you calculate the right taxes and National Insurance, and so on. We also take care of the reporting. We also do payments, and we integrate the product to other HR products.”
Adam Valkin, managing director at General Catalyst said: “Despite being so business-critical, payroll is one of the least digitally advanced services across the globe. It’s also one that has garnered a reputation for being too complex, too convoluted and too out of reach for those who aren’t payroll specialists, leading many to consider expensive outsourcing as the only route to go. Pento dispels this myth because it’s built purely with HR and finance teams in mind, by business leaders who truly understand the frustrations involved. It’s easy to use, transparent, flexible, secure and affordable. It’s what payroll should be in a modern company and it represents the future of employee compensation.”
Pento’s angel are from Stripe (Thairu and Diede van Lamoen), Monzo (Tom Blomfield), GoCardless (Matt Robinson), Zoom (Eric Yuan), Cuvva (Freddy Macnamara), Intercom (Des Traynor) and others.