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Zenefits, an HR start-up, now worth $4.5 billion

Zenefits, a cloud-based automated human resources business, said Wednesday it has raised $500 million in a series C round of funding, giving it a valuation of $4.5 billion.

The funding marks the largest public or private round for a software-as-a-service company since the Workday IPO in October 2012. A variety of backers, including Andreessen Horowitz and Fidelity Management, are supporting Zenefits.

The company sees a massive opportunity to offer human resources services to millions of small and medium-sized businesses overlooked by larger companies, said Parker Conrad, Zenefits' founder and CEO. The company offers employers a free dashboard that lets them manage payroll, health insurance and other services. It then collects fees from benefit providers that use the system.

For Andreessen, an early backer, Zenefits has just become its largest investment ever. Zenefits launched in 2013 and has signed up more than 10,000 small- and medium-sized businesses in the interim.

Zenefits intends to use the latest round of funding to hire employees in all lines of work to fuel further growth, Conrad said.

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Private equity financing of $200 million in tech and biotech were, until recently, almost unheard of. Now they're routine. Prior to Wednesday, of the 25 such funding rounds since the end of 2010, eight happened in the first four months of 2015, according to data compiled by DataFox.

This year's biggest was SpaceX's $1 billion round announced in January, and among business-software companies the largest was Domo's $200 million financing in April.

Last month, peer-to-peer small business lender FundingCircle pulled in $150 million, and LendingClub rival Prosper Marketplace raised $165 million. SoFi—a Web-based start-up focused on refinancing student loan and, increasingly, mortgages—pulled in $200 million.