HomeFundingBarcelona-based Factorial bags over €120 million and becomes Europe’s newest unicorn

Barcelona-based Factorial bags over €120 million and becomes Europe’s newest unicorn

Barcelona-based Factorial has just raised over €120 million at a +€1 billion valuation making it the latest European unicorn and the fastest-growing company in the HRtech space. It’ll now accelerate global expansion plans and enhance its offering to SMBs.

Regardless of how turbulent the economic climate may be, businesses of all sizes and in all industries need to have a solid HR system in place. For SMBs, managing HR processes can be a struggle, as they deal with a resource deficit. And when budgets get tightened, the need for a cost-effective all-in-one solution that still provides optimal performance only increases. 

Meeting this need is Factorial – the all-in-one people-first fully-automated HR management platform, built with SMBs in mind. The Barcelona-based company has seen impressive growth since its launch in 2016, and now, it’s being welcomed into the exclusive unicorn club. 

Factorial CEO and founder Jordi Romero: “HR has gone through a seismic shift across every industry – from a focus on workforce control to the primary function of empowering and challenging your employees. Getting this right results in a key SMB strength: a close-knit, people-centric culture that many workers seek.”

Making of a unicorn

Today, the company has announced the closure of a Series C round at about €122 million ($120 million) at a +€1 billion valuation. 

The round was led by Atomico, with participation from GIC and all previous investors including Tiger Global, CRV, K-Fund and Creandum. Atomico Partner Luca Eisenstecken joins the Factorial board as part of the investment.

Jordi Romero added: “We are proud to partner with Luca and the Atomico team, a firm that truly cares about making sure the next big tech company emerges from Europe,  to address this massive shift of SMBs searching for HR software built just for them. Factorial is uniquely positioned to serve this continually expanding untapped market.”

The Barcelona-based HRtech innovators have experienced over 200% annual growth in revenue every year since 2019, accelerating to 3.7x growth since the company’s Series B round a year ago and expanded to a team of 800 across offices in Brazil, Mexico and Spain.

This new announcement is the cherry on top of a very well-enjoyed cake and reflects strength in the company’s idea as well as a successful strategy of product development and market expansion. 

Enterprise-grade HR for SMBs

Founded in 2016 by Jordi Romero (CEO), Bernat Farrero (CRO) and Pau Ramon (CTO), Factorial was developed with the vision to enable SMBs globally to make better people decisions based on data and increasing data-driven insights.

The firm is uniquely positioned, specifically addressing two interconnected problems that SMBs face, right across the world and within almost every market area. 

Firstly, small and medium businesses don’t tend to hire dedicated HR staff until much later in their growth. Now, with increasing hybrid and remote work, worker shortages and high competition for talent, SMBs are struggling to remain competitive while efficiently managing workforce complexity. Secondly, SMBs are underserved in the HR software market in relation to larger enterprises which are the main customers for these tools, with only 30% of SMBs having used software to source and recruit candidates in 2021.

SMBs have, therefore, struggled on using a mix of standalone tools that don’t integrate well and are pretty time-consuming to operate. As a result, business owners lose sight of the big picture. This also doesn’t leave much time to focus on developing people and culture, or to access data-driven insights to make informed decisions around time, talent and finances. 

These dual factors mean that SMBs often lose out on what should be a key strength: building an organisation that puts its people at the centre. Catering exclusively to this market need, Factorial has been able to establish itself as a strong player in the international arena. 

Atomico partner Luca Eisenstecken: “SMBs are vastly underserved in the current HR software market, which is focussed on attracting large enterprises and these products are often too complex and costly for small businesses. Factorial is radically different in that it is a horizontal product designed with SMBs in mind. Factorial’s all-in-one software replaces time-intensive manual work and offers insights and metrics to provide essential support and allow smaller companies to foster a people-first approach whilst scaling the business.”

The scale-up’s product operates horizontally, meaning it can make every HR feature more powerful and efficient by having them operate seamlessly in one place, rather than a complex suite of multiple tools, platforms and features). For example, having time tracking automatically connected to compensation, performance management and payroll becomes easy when every feature lives inside the same SaaS platform. 

International reach

From its Barcelona roots, Factorial has grown its customer base from  70 to 7,000 since 2019, spanning nine global markets and making Factorial probably the fastest-growing company in the industry.

It’s already trusted and used by the likes of Freshly Cosmetics, Vicio, Booking.com, and Whisbi. And by the way: The EU-Startups team is also using Factorial.

The young company will use the fresh funding to further scale operations in existing markets across UK, Spain, US, Germany, Italy, Portugal, France, Mexico and Brazil, including opening a dedicated office in Miami and expanding into new markets globally.  This new investment will also allow Factorial to expand its product depth and feature range, thereby solving more problems related to people management for small and medium businesses.

Patricia Allen
Patricia Allen
is the Head of Content at EU-Startups. With a background in politics, Patricia has a real passion for how shared ideas across communities and cultures can bring new initiatives and innovations for the future. She spends her time bringing you the latest news and updates of startups across Europe, and curating our social media.

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