A one-million-euro investment, and the Samwer brothers, founders of Stylight and eGym, are on board – things are definitely going well for the Munich HR startup Personio. We talked with the four founders about how the bootstrapped startup got to where they are now, and found out what makes their product so unique.
The excellent news from Personio was quite a topic of conversation last summer. The Munich-based startup launched in 2015 and managed to secure a seed investment of 2.1 million euros in its very first round of financing. Behind the scenes, the time before that excellent news was anything but relaxed, explained one of the founders, Ignaz Forstmeier:
“When we were working nonstop to find investors in the spring and were not able to pay salaries for a longer period of time, we really started to feel the heat. Fundraising is usually a full-time job for at least one founder. At the same time, the startup needed to continue growing every month, without any marketing budget at all, to keep possible investors interested.”
Nonetheless, the team led by Personio’s founders – Hanno Renner, Roman Schumacher, Arseniy Vershinin and Ignaz Forstmeier – had confidence in the startup during that time thanks to the overwhelmingly positive feedback from their first client.
Growth through recommendations
The company’s success proved that their confidence was justified. With its holistic, cloud-based HR and recruiting solution for small and medium-sized enterprises, Personio grew its customer base from roughly 20 to 100 companies in 2016. It is worth noting that this growth was solely due to the lead marketing channel of “recommendations from existing clients.” On top of that, the company was able to win over the Samwer brothers, who are prominent investors as well as the founders of Stylight and eGym, Global Founders Capital and Picus Capital.
At this point, interested readers will be asking themselves what makes Personio’s solution so special, seeing that HR tools are not necessarily the latest trend. Hanno Renner explained:
“What makes us different from our competitors is that Personio is extremely adaptable despite its cloud / Software as a Service strategy. For example, access rights, approval processes and attributes in digital employee files can be modified in the interface to meet the precise needs of a company without needing to implement expensive and lengthy development projects. Some of our clients manage offices in five different countries, with different access rights and vacation regulations for every location.”
Compared to US service providers, the Munich-based startup is also distinguished by its high data protection standards. The servers are all run by certified providers using data centers located in Germany. Furthermore, many companies appreciate that Personio offers all of the HR processes that small and medium-sized companies need, essentially from a single source. That saves time, money and importing work.
When it comes to target groups, the Munich company also takes a different approach than the heavyweights in the market such as BambooHR, PeopleHR and Zoho People. Personio focuses on companies with 10 – 1,000 employees. According to the Munich startup, no smart solutions have been developed for this target group yet. When considering the 400,000 small and medium-sized companies in Germany alone, the number of potential customers is not to be scoffed at.
Making more time for value-adding activities
What tools does Personio have in its portfolio, exactly? Founder Forstmeier clarified:
“Our solutions can be used for multiple job postings, applicant management, employee onboarding, digital employee files, vacation management, approval processes, salary management, attendance management, document management, performance tracking, reports, reminders and payroll administration.”
In addition, every employee is given access to their own personal account where they can be directly involved with HR processes such as vacation requests, master data changes and applicant evaluations. The access rights for each account can be configured as needed. The primary goal is to speed up and simplify the management of recurring processes and to ultimately give HR departments more time for value-adding activities.
What do you have planned next, with a one-million-euro investment in your pocket?
“We just moved into a bigger office and are in an exciting stage of growth that involves increasingly active marketing and sales activities. Given our strong growth, it is most important to us to maintain the high quality of our customer service as well as our rapid implementation of new ideas. That is why we are investing first and foremost in expanding our team in the areas of customer success, product development and software engineering.”
Munich should be proud of its startup activities
When asked about Munich as a startup location, the men of action behind Personio have mostly only good things to say. The startup scene might be smaller, but in their opinion, it is also more closely networked than Berlin:
“Looking at success stories like Pay.On and Stylight proves that Munich should be proud of its startup activities.”
The four consider the low staff turnover in Munich to be a significant advantage: “You can tell that headhunting is not as aggressive in Munich as it is in Berlin.” The busy founders also genuinely appreciate the recreational opportunities offered by the Alps. The only downside:
“It is typical for startups to get prepared meals from a supermarket, but that is virtually impossible here after 8 pm.”
On a more serious note, Hanno, Roman, Arseniy and Ignaz feel that there is definitely still room for improvement in the Bavarian state capital. Especially when it comes to scalable office space at affordable prices — it is just too difficult to find in Munich, particularly in a central location. To help them convince good developers to relocate from abroad, the four founders also hope that Munich will become even better established as a startup city in the future. We’ll keep you informed — about Munich and Personio.