PayFit, the cloud-based payroll and HR management platform, has announced it raised $107 million (€90 million) in Series D funding as it aims to be the HR tech provider for a growing number of Europe’s small and mid-sized companies. 

PayFit’s plan to grow

Leading the investment round for the Paris-based company are Eurazeo Growth, Large Venture and BPI France, along with support from previous investors Accel, Frst, and French billionaire Xavier Niel. 

Since its founding in 2016, PayFit has grown to 550 employees operating in five European countries, including France, Germany, Italy, Spain, and the UK. The company says this latest round of investment will help it enter a “hypergrowth” phase that will push its employee count past 800 by the end of 2021. 

PayFit is one of a growing number of cloud-based HR software sellers targeting small and mid-sized businesses, aiming to lure them away from managing HR processes using spreadsheets or human resource management system software from larger software vendors. There is a large potential market for these systems: Europe has more than 25 million small and mid-sized businesses (which go by the term small and medium-sized enterprises, or SMEs, in Europe) representing 99.8% of all European companies, according to the European Commission.

SMB reviewers dominate Payroll category

Within G2’s Payroll software category, the number of reviews from users at both small and mid-sized businesses has outpaced reviews from users at enterprise businesses (those with 1,000 employees or more) since early 2018. 

PayFit offers a browser-based payroll and HR management tool targeted at businesses with fewer than 500 employees. It includes automated payroll processing, an employee self-service portal, and tools for managing employee absences and onboarding new hires.

The company says it also plans to use the investment to add additional features focused on employee engagement, such as feedback surveys and weekly meetings.