A multi-million investment and the Samwer brothers, founders of Stylight and eGym, on board: Things are going really well for the Munich-based HR startup Personio. We spoke with the four founders about the path the previously bootstrapped startup took and what makes their product so unique.
The Success message from Personio made the rounds last summer: The Munich-based startup, founded in 2015, secured a €2.1 million seed investment in its first round of financing. However, the time leading up to this relieving announcement wasn't always so easy behind the scenes, as Ignaz Forstmeier, one of the founders, explains:
"When we were desperately looking for investors in the spring and couldn't pay our salaries for an extended period, we were starting to sweat a bit. Fundraising is usually a full-time job for at least one founder. At the same time, the young company had to continue growing every month without a marketing budget to keep investors interested along the way."
What gave the team around Personio founders Hanno Renner, Roman Schumacher, Arseniy Vershinin and Ignaz Forstmeier confidence even during this time was the consistently positive feedback from the first customers.
Growth through recommendations
And their success proves them right. With their holistic, cloud-based HR and recruiting solution for small and medium-sized businesses, Personio was not only able to increase its customer base from around 20 to over 100 companies in 2016 — incidentally, solely through the acquisition channel “Recommendation from existing customers” — but also convince well-known investors such as the Samwer brothers, the founders of Stylight and eGym, Global Founders Capital and Picus Capital.
This may raise the question for the interested reader: What makes Personio's solution so special? HR tools aren't exactly the latest trend. Hanno Renner comments:
“What sets us apart from our competitors is that Personio, despite its Cloud / Software-as-a-Service strategy, extremely adaptable For example, access rights, approval processes, or attributes in the digital personnel file can be tailored precisely to the company's requirements via the user interface, without the need for expensive and lengthy development projects. Some of our customers manage offices in five different countries, with different access rights and vacation policies at each location.
The Munich-based startup also sets itself apart from US providers by high data protection standards When operating its servers, it relies exclusively on certified providers with data centers in Germany. Furthermore, many companies appreciate that Personio all HR processes, which are usually relevant for small and medium-sized enterprises, from a single source This saves time, money, and integration effort.
In terms of target groups, the Munich-based company is also betting on a different horse than the big players on the market like BambooHR, PeopleHR, and Zoho People: Personio focuses on companies with 10–1,000 employees. According to the Munich-based startup, there are no smart solutions for this target group yet. And the number of potential customers is not to be underestimated, with 400,000 small and medium-sized businesses in Germany alone.
Gain more time for value-adding activities
And which tools exactly does Personio have in its portfolio? Founder Forstmeier says:
"Our solutions can handle, among other things, job multi-posting, applicant management, employee onboarding, digital personnel files, leave management, approval processes, salary management, attendance management, document management, performance, reports, reminders, and preparatory payroll accounting."
In addition, each employee receives access to their own user account, allowing them to be directly involved in HR processes such as vacation requests, master data changes, or applicant evaluations. Access rights for each account can be freely configured as needed. The overarching goal: to manage recurring processes faster and more easily, ultimately freeing up HR departments for more value-added activities.
What happens now with the million-dollar investment in your pocket?
"We have just moved into a larger office and are entering an exciting growth phase, which also includes increasingly active marketing and sales efforts. Most importantly, in the face of strong growth, we do not want to lose sight of our high level of customer service and our speed in implementing new ideas. Therefore, we are investing primarily in expanding our teams in the areas of customer success, product development, and software engineering."
Munich has nothing to hide as a startup location
The people behind Personio also have almost nothing but positive things to say about Munich as a startup hub. While the startup scene may be smaller, they believe it's also more closely connected than in the capital, Berlin:
“A look at success stories like Pay.On or Stylight shows that Munich has nothing to hide as a startup location.”
The four see the low staff turnover as a clear advantage: “In Munich, it seems that people are not being poached as aggressively as in Berlin.” And also the high leisure factor "Alps" The busy founders appreciate this. The only drawback:
“The purchase of ready meals in the supermarket, so typical for startups, fails here as early as 8 p.m.”
But Hanno, Roman, Arseniy, and Ignaz also seriously see potential for optimization in the Bavarian capital. Especially when it comes to scalable office space at affordable prices—which is simply too difficult to find in Munich, especially in central locations. And to convince good developers from abroad to relocate, the four hope that Munich can further establish itself as a startup city in the future. We'll stay tuned—for Munich and Personio.
