Pento lands $35M to automate payroll processes

Pento, a payroll automation agency primarily based within the U.Ok., immediately introduced that it secured $35 million in collection B funding led by Tiger Global and Avid Ventures, bringing its total capital raised to $53.4 million. General Catalyst, Latitude, and Seedcamp additionally participated within the tranche, which cofounder and CEO Jonas Bøgh Larsen says will likely be put towards product improvement, service progress, companion integrations, and growth into new European nations.

It’s estimated that 82 million U.S. workers — or 54% of the American workforce — are affected by varied payroll issues. The penalties could be extreme for enterprises already affected by employee shortages exacerbated by the pandemic. According to a current survey from the Workforce Institute at Kronos Incorporated, 49% of employees will begin a brand new job search after experiencing solely two issues with their paycheck.

Perhaps unsurprisingly, a rising variety of companies are turning to automation as a possible resolution.  A 2019 EY report discovered that corporations “continue to invest heavily in emerging technologies, with a high percentage of surveyed organizations either using or planning to use intelligent automation and chatbots for payroll processing and interaction with employees.”

Automating payroll

Launched by Larsen and Emil Hagbarth Rasmussen in 2017, Pento’s software-as-a-service product streamlines tax calculations and integrates with tooling, banking, human assets (HR), and accounting programs. Rasmussen and Larsen, who beforehand cofounded two ecommerce startups, Hivebeat and Greenticket, describe Pento as an all-in-one resolution for payroll automation.

“Payroll has been a manual and arduous process for decades; we experienced this first hand with our first venture — as we had to outsource payroll to third-party vendors, and by having to manually check almost every element of the payroll process every single month — which captured quite a lot of senior leadership time,” Larsen advised VentureBeat by way of e-mail. “We saw the opportunity to help modernize this through automation. Just about every enterprise, especially those with hundreds of employees, could potentially be a Pento customer, so the market opportunity for us is immense.”

Pento imports current worker knowledge together with wage and wage sort, tax code, deductions, and pension data from Personio, Hibob, BambooHR, and different software program. The platform makes real-time calculations and automates funds, checking for issues like whether or not workers are eligible for pensions and setting the dates for statutory or parental pay.

In addition, Pento has developed an open payroll API, presently in beta, which is able to enable companies to construct customized integrations to automate workflows akin to time-tracking or shift planning. The API can even enable workers to share pay and compensation knowledge with third-party apps and companies to validate their earnings to credit score businesses, in addition to different monetary and HR organizations.

“In the future, one way we could utilize all the data created through Pento would be to enable consumers to share their pay history and pay data with third-party products to get better loans or improved credit scores,” Larsen added. “For instance, instead of having to print six pay slips to show your bank to get a mortgage approved, it could be easier to share the pay data from Pento to streamline the process. This is something we could look to introduce down the line.”

Growing adoption

In a 2018 Deloitte study, solely 6% of corporations stated that they had been utilizing some side of course of automation for payroll processing. But 16% of respondents to the identical examine stated that they had been planning to make use of automation within the close to time period, with 5% saying they had been already piloting it as a part of their payroll operations.

Seventy-employee Pento — whose rivals embody Botkeeper, Employment Hero, and Zeni — says it’s noticed an uptick in enterprise because the pandemic motivates corporations to embrace digital transformation. Since the beginning of 2021, income has elevated ten occasions, and corporations throughout tech, hospitality, retail, and ecommerce have signed on.

“The pandemic has meant that more companies have started evaluating whether the manual processes they had before were still working well when working remotely,” Larsen stated. “Any software-as-a-service product will tell you it’s forced people to reconsider some of the processes and move more of those to the cloud. Pento has benefit from this shift in thinking.”