ZenPayroll Gets $60M

Cloud-based payroll startup ZenPayroll has closed a $60 million funding round — and it has barely touched the $20 million it raised just over a year ago, the company said on Monday (April 6).

The Series B round was led by Google Capital, with participation from new investors Emergence Capital Partners and Ribbit Capital, along with existing investors that include General Catalyst, Kleiner Perkins Caufield & Byers, and Google Ventures, the company announced. The round brings ZenPayroll’s total funding to $86 million.

The new money will go to expanding into the three U.S. states where ZenPayroll doesn’t currently have customers — Wyoming, Delaware and Vermont — as well as adding an East Coast office to serve customers three time zones away from its San Francisco headquarters and increasing staff. The company will also add new features to better support larger customers.

And there’s plenty of money to spend. ZenPayroll CEO Joshua Reeves said in an interview that the company had $17 million left from its Series A round in February 2014. But now ZenPayroll expects its own payroll to grow from less than 90 employees to 300 employees in 2015, with hiring in engineering, product design, customer care, sales, marketing and business development.

In the past year, the company has grown by a factor of 10 and now processes payroll for 10,000 companies. That still leaves plenty of room to grow — industry leaders Paychex and ADP combined serve about a million customers, while a total of 6 million U.S. companies have payroll needs.

And while payroll processing is a $29 billion business, last fall ZenPayroll said it was processing $1.5 billion annually. The company’s customer count has more than doubled since then.

ZenPayroll also opened up its API in 2014 for better integration by other cloud-based providers including BambooHR and Zenefits. And while the 2012 startup wants to add features to support bigger customers, including those that use Paychex and ADP, the largest untapped market is companies that need payroll services but are too small for ZenPayroll’s larger rivals. “We have ambitions to help all businesses everywhere, regardless of size,” Reeves said.