The Israeli startup Hibob, which develops a platform for employee management, today (Wednesday) announced the completion of a Series D fundraising round for $150 million. The round was led by Bessemer Venture Partners and General Atlantic with participation from existing investors. The round was carried out according to a valuation of $2.45 billion and is the second round of $150 million completed by Hibob in 10 months. During that 10 months, the company's value jumped by almost a billion dollars. This is far from the norm we are seeing in today's market.
"Investments and valuations are not like blowing up a balloon"
Hibob's platform, called Bob, is a SaaS platform designed for small and medium-sized businesses and helps them manage employees. From the onboarding process which includes contract creation, to managing days off and options in the company, to even arranging employee dismissal. Instead of managing countless Excel reports that no one wants to fill out, everything is done in one system that is designed to perfection.
Hibob’s system can be especially helpful to companies during these times of uncertainty to better manage and stabilize their workforce. Hibob, as mentioned, has now raised $300 million in less than a year– as the previous round was at the peak of Israel’s insane fundraising year. In a conversation with Geektime, Ronni Zehavi, the CEO and one of the co-founders said that "The main difference between the two rounds is the outside noise; recruitments and valuations are like building a wall– many layers are put down, one at a time. It is not however like blowing up a balloon. So, this time around, the investors were much pickier about what they wanted to see in terms of numbers and the company's story.”
Still, it's not an easy time for VCs and startups. Did you feel any difficulty recruiting the funds?
"We had two offers from external investors at very good values, and finally our existing investors – General Atlantic and Bessemer among others) – offered to lead the round themselves, and we accepted that offer."
Not even a year has passed since the previous round. Why recruit again so quickly?
"We realized that the slowdown in the market creates unique growth opportunities, for example, the acquisition of companies, the further development of our product, the expansion of our global activities (e.g., opening an office in Germany), and the overall growth of our current activity. We want to be able to catch the wave when the market comes out of this deceleration and starts growing again, which will probably happen in the second half of 2023 or the beginning of 2024."
"What happened in 2021 was a bubble, and bubbles burst"
Hibob is the fourth company to report a mega-fundraising round of at least $100 million in the last 3 days. It was preceded by Guesty, DriveNets and Pliops. However, Zahavi does not see these recruitments as a path to being on track to how things were in 2021. "What happened in 2021 was a bubble. And bubbles burst. The market in 2021 did not represent the proper business requirements for a sane market. There must be logic which did not exist in 2021. Now, there has been a correction and the market is coming back to equilibrium, just as it has in previous crises. Promising companies with excellent products, which solve real-world problems and are backed by good people will continue to grow, receive funding, and become part of the world's top companies. Plain and simple."
Hibob was founded in 2015 by Ronni Zahavi and Israel David (CTO). Hibob employs 650 people in its offices in Israel, the U.S., Canada and in several countries throughout Europe including Great Britain, Germany, Sweden, Denmark, the Netherlands, and Spain.