Japanese HR tech giant SmartHR has closed a Series E.
The round was led by KKR and TGV and comes three years after SmartHR became a unicorn.
Let's dig into the round, and find out how SmartHR will use to move to continue to grow, both inorganically and organically.
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The $38 billion HR tech market is booming right now. There are a plethora of mergers, acquisitions and funding rounds going on in the sector.
Hot on the heels of a $42.7 million Series B from TechWolf, and acquisitions by the likes of Deel, Cornerstone and Workday, the latest HR tech deal news comes from Japanese-based HR and labor management SmartHR.
SmartHR has raised $140 million in a Series E funding round, which was led by KKR, and Teachers Ventures Growth (TGV), the late-stage venture and growth investment arm of Ontario Teachers’ Pension Plan. There was also participation from the existing shareholders.
The Series E is part of KKR’s Asia Next Generation Tech strategy – other recent investments in Japan include Yayoi, dataX and NetStars.
This comes three years after a $142.5 million Series D round (investors in the Series D included Light Street Capital, Sequoia Capital Global Equities and Whole Rock).
Following the 2021 Series D, SmartHR was valued at $1.6 billion, making it a HR tech unicorn. According to TechCrunch, SmartHR’s annual recurring revenue sat at $100 million in February 2024.
A bright future for SmartHR
Founded in 2013, and launching its cloud-based software in 2015, SmartHR claims to support 60,000 companies across a range of industries.
Examples include Nissin Holdings, NTT Data, Mediclude and JFE.
Talking about the funding round, KKK Partner and Head of Growth Equity, Asia Pacific Mukul Chawla shared: “As one of Japan’s leading human resource Software as a Service (SaaS) platforms, SmartHR is playing a critical role in enabling the country’s drive towards greater workforce productivity, while leaning into accelerating digitalization and cloud penetration.
“Through our technology growth strategy, we look to support innovative, disruptive local champions with our expertise, best practices and networks across KKR’s global platform.
SmartHR is an exceptional example of Japan’s new economy, and we are delighted to work with the company’s management, board and TVG in supporting SmartHR in the next phase of its growth.”
TCG’s Executive Managing Director and Global Head Olivia Steedman added: “SmartHR has demonstrated innovative ways to help companies of every size improve how they manage and develop their workforces.
“As Japanese companies increasingly transform their businesses with digital solutions, SmartHR is well-positioned to support a variety of their labor management needs.
“We look forward to working alongside KKR to help accelerate SmartHR’s growth journey while also leveraging our global expertise to find ways to be a value-adding partner.”
SmartHR is planning to use the Series E funding to develop new solutions and look at its growth strategies, both organic and inorganic.
This could be acquisitions or mergers are around the corner – stay tuned.
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