ZenHR, a human resource technology start-up in Saudi Arabia, has raised $10 million to scale up its operations across the Middle East and North Africa.
The funding round was led by Saudi Arabia's Rua Growth Fund, with the participation of US-based Endeavor Catalyst and other existing investors, the Riyadh-based company said on Tuesday.
ZenHR offers products covering automated payroll calculations, onboarding and offboarding of employees, attendance and time-tracking, performance management, employee self-service and an applicant-tracking system.
The company is “rapidly approaching” 1,000 customers and 100,000 users across the Middle East and North Africa region, having reached this scale “with little to no funding”, said co-founder and chief executive Yousef Shamoun.
“We are confident that this partnership [with Rua] will allow us to expand our regional footprint in all 12 markets we serve and strengthen our presence even further in Saudi Arabia, our main market,” he said.
Automating HR processes has become a vital component in an era of digitisation, which is helping companies to streamline their operations — from recruitment and hiring to other key functions.
More than $12 billion in venture capital funding was invested globally in the HR technology space in 2021, with the rate of activity more than tripling, according to a report from the Boston Consulting Group.
There was also a high volume of mega deals, those whose value is $100m and above, with 40 of these signed last year, BCG said.
Saudi Arabia is hastening its digital transformation push, with a focus on start-ups, as it banks on technology to power its future economy.
Venture capital funding in the Arab world's largest economy surged more than threefold to $584m in the first half of 2022, surpassing the total for the whole of 2021, start-up platform Magnitt said in a recent report.
Turki Aljoaib, co-founder and managing partner of the Rua Growth Fund, said strong economic growth in the country and the rise in job opportunities also posed an opportunity for HR technology companies.
“As the kingdom witnesses record economic growth and job creation, we believe ZenHR is well positioned to capitalise on the growing need for HR digitisation,” he said.
ZenHR, which began operations in 2017, serves Saudi Arabia, the UAE, Bahrain, Egypt, Kuwait, Iraq, Jordan, Lebanon, Oman, Palestine, Qatar and Yemen.
The company, which employs 160 people, said it has achieved triple-digit growth while its subscription revenue was about three times higher on an annual basis.
Digitisation in HR helps companies to move “faster and smarter, and makes employees happier”, ZenHR said.
The company's customised software offerings comply with labour and tax laws, social insurance and payroll policies, and other regulations across the region, it said.
“We have followed this important trend in the digitisation of HR platforms across more than 40 markets globally … this is a segment of the economy where the future is clearly digital,” said Allen Taylor, managing partner of Endeavor Catalyst, which has been an active investor in Mena over the last decade.