SmartHR, a startup serving to Japanese employers run HR and staffing smarter — as a result of that’s in fact its identify — has raised a JPY 1.5 billion ($13.three million) Collection B spherical led by 500 Startups Japan.
The startup is maybe similar to the likes of Zenefits and Gusto within the U.S. — it goals to pull Japanese HR departments into right this moment’s digital period.
“In Japan few firms take into consideration doing their HR on-line, they’re accustomed to doing it in spreadsheets and paperwork,” Takafumi Kurahashi, SmartHR’s COO, informed TechCrunch in an interview.
SmartHR was based in 2015 and it has 50 employees right this moment. The service is presently focused at new worker enrollment, which historically requires a hefty stack of paperwork carted backwards and forwards between authorities places of work. By means of its service, the cumbersome course of may be completed digitally and that has helped it appeal to 10,000 prospects, together with unicorn e-commerce agency Mercari.
Proper now, the startup doesn’t cowl payroll, advantages or different areas but it surely plans to maneuver into these.
The cash goes to be put to work doubling SmartHR’s headcount to allow it to develop these new options and construct a platform. The corporate hopes to turn into the digital system of report for Japan, which suggests it should open its doorways to third-party providers that may be hosted on its platform. One small pilot, for instance, offered enterprise card printing providers to HR shoppers, a synergy that is sensible for the reason that SmartHR system is used to onboard new hires.
The platform play is more likely to come subsequent yr. For now, it’s engaged on new options requested by prospects. That features permitting for a number of branches/chain shops inside the system, a request significantly wanted by clothes shops and different excessive avenue retailers which have excessive ranges of worker churn.
SmartHR can even spend money on advertising. So far it has promoted its providers utilizing on-line, but it surely plans to achieve new prospects by means of offline channels corresponding to media commercials and exhibitions.
Past SmartHR itself, the spherical is notable on the funding facet as a result of it’s the first time 500 Startups — a prolific investor with a portfolio of different 1,000 firms — has led a Collection B spherical. Added to that, it did so utilizing a particular objective automobile (SPV) which, whereas pretty widespread within the U.S., isn’t utilized in Japan.
Amongst its advantages, an SPV permits a cleaner cap desk with one single entity choosing up a stake in a startup. Completely different traders enter the SPV to take their share of that fairness.
Chatting with TechCrunch, 500 Startups Associate James Riney — who leads 500 Startups Japan — defined why he suggested, and in the end led, the SPV for this deal.
“Corporations like SmartHR don’t come round fairly often so we questioned how we may seize the worth past our early stage funding,” he mentioned.
Riney mentioned Japan’s personal distinctive, and pretty risk-averse, funding ecosystem made an SPV the best answer on this case.
“There aren’t many locations startups can go to [raise a large round.] You possibly can have a ‘celebration spherical’ for $1 million right here and there, but it surely takes plenty of time as a result of [the founders] discuss to lots of people, spend plenty of time reporting and lose that startup pace,” he defined.
On this case, SmartHR CEO Shoji Miyata is estimated to have spent simply 10 hours concerned in fundraising. That’s as a result of Riney was capable of do plenty of the outreach, utilizing different members of Miyata’s crew the place essential, to safe commitments to the SPV.
COO Kurahashi additionally talked up the effectivity of the method.
“Fundraising is an effective alternative for a corporation to revisit and refine its technique, however it’s too time-consuming that it usually slows down the corporate development. This joint spherical with 500 gave us the luxurious to take solely the nice components of fundraising,” he added.
Riney mentioned the SPV is “the first of its type in Japan that we all know of.” In the proper circumstances, 500 Startups Japan could use the identical method once more sooner or later, he added.
Featured Picture: SmartHR