Munich Personio, one of the highest-rated start-ups in Germany, is venturing into its second acquisition. The personnel software specialist takes over the Berlin software start-up Back Technologies. “Many of our customers use both products, and we can now integrate Back’s software even more deeply,” Personio founder Hanno Renner told Handelsblatt.
Back Technologies automates personnel processes and merges channels such as e-mail, WhatsApp and Slack. With the technology, for example, classic employee inquiries via Slack or teams on salary topics can be answered automatically using artificial intelligence or forwarded to the right place. Back has “an enormous amount of experience in the development of workflows that merge fragmented tasks,” says Renner.
Personio is one of the German unicorns with a billion-dollar valuation. In the last round of financing so far in the fall, the company raised another 270 million dollars. With a valuation of more than six billion dollars, Personio was at times the second highest rated German start-up.
With this, Personio has once again procured fresh capital at a favorable time – which was actually not needed at all. Meanwhile, the global upheavals have led investors to take a closer look at large financing rounds. Trade Republic, N26 and Gorillas are said to have had a hard time with fundrising. In start-up circles, the fear of “flat rounds” or even “down rounds” is already going around. This refers to financing rounds in which the company valuation does not increase or even decreases.
“We are pleased to be very well capitalized in the current environment,” said Renner. He sees the currently lower valuations at start-ups rather relaxed. Because Personio has a functioning, resilient business model. Such companies would always find investors. “Our business model also works in a global recession,” says Renner.
Grow, grow, grow
Last year, according to industry estimates, Personio’s sales more than doubled to a mid-double-digit million amount. “We believe that we can sustain the three-digit growth rates for a long time,” said Renner. Only 0.35 percent of the potential market in Europe has been tapped and the functionalities are being expanded.
The Berlin-based start-up Back has been working with Personio for several years. The IT tools could be connected to the Personio software. “We are therefore very pleased to continue to advance workflow Automation together with the market leader People,” said Back co-founder Christian Eggert.
The CEO used to be a manager at the Rocket Internet holdings Zalando and Westwing before he founded his first own company: Minodes, a provider of digital analysis tools for the retail industry. He later sold the company to the Spanish telecommunications group Telefónica.
Eggert then founded the food delivery service Bonativo. The company was never able to fully meet expectations and was acquired by French competitor Foodassembly in 2016. Back Technologies is now Eggert’s third self-founded company.
Personio has developed a standard software for the personnel management of small and medium-sized companies. The goal is to become a kind of SAP for HR managers in companies with up to 2000 employees. Personio sees 1.7 million companies in Europe as potential customers.
The chemistry must be right
For Personio, the acquisition is also a way to attract qualified personnel. “It was important to us that the team, including the founders, remained on board,” said Renner. He also announced the opening of a new office in Berlin. Initially, 20 employees who were previously in the home office will work here. There is also a new location in Barcelona. Personio hopes to gain access to other tech talents.
For Personio, it was the second acquisition after the purchase of the Spanish payroll specialist Rollbox three years ago. The purchase price for baking is in the low double-digit millions. Renner can imagine further acquisitions. “However, we are very selective when it comes to acquisitions,” he says. “It has to fit very well with what we are doing so far.” The chemistry must also be right culturally.