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SmartHR Raises $140M in Series E Round as HR Tech Demand Surges

SmartHR secures $140M in Series E funding to expand its cloud-based HR management solutions amidst rising global demand
July 2, 2024

SmartHR, a cloud-based HR and labor management software startup from Japan, has secured $140 million in its latest funding round. The Series E round, led by KKR and Teachers’ Ventures Growth also saw participation from existing investors. This funding comes three years after SmartHR’s $142.5 million Series D round, underscoring investors’ continued interest in technology that optimizes workforce management.

Founded in 2015 by Kensuke Naito and Shoji Miyata, SmartHR has experienced robust demand for its SaaS platform, which simplifies HR and operations management for enterprises. As of February 2024, the company’s annual recurring revenue (ARR) hit $100 million, a significant increase from the $80 million reported in FY 2023. This growth aligns with the global surge in HR tech demand, as businesses seek efficient ways to manage their workforce, the largest component of their cost base.

SmartHR has benefited from a growing market for HR technology solutions. The global HR tech market is projected to reach $81.84 billion by 2032, according to Fortune Business Insights, attracting significant venture capital investments.

In Japan, SmartHR competes with back-office software providers like Works Human Intelligence, freee, and Moneyforward. SmartHR distinguishes itself by leveraging the latest and most accurate employee data through its labor management system, positioning itself as a key HR system of record. This data-driven approach enables rapid deployment of new products and services.

The newly raised capital will be used to develop innovative solutions, expand the team, and pursue both organic and inorganic growth strategies, including mergers and acquisitions. With around 1,000 employees, SmartHR is poised to continue its growth trajectory and solidify its position as a leader in the HR tech space.

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