Founders: Joshua Reeves, Tomer London, Edward Kim
Date launched: 2012
Funding: $86 million
Industry disrupted: Automated payroll systems
Ask small-business owners to name one of their least favorite tasks and managing payroll will rank right near the top. It's time-consuming, confusing and, in many cases, expensive. ZenPayroll aims to change that. This Silicon Valley start-up, founded by three Stanford University graduates, gives small businesses a simple and affordable way to manage their payroll process online, similar to the way individuals pay their bills online.
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Employers can set up ZenPayroll's process quickly, and the Web-based program calculates taxes, payments and direct deposits. ADP, Paychex and Intuit are the three giants in the automated payroll industry now, but ZenPayroll claims their processes are too tedious and expensive for small businesses with fewer than 100 employees. The company has 10,000 small-business customers. They pay $25 per month for the service and $4 per employee per month.
With the growing number of small businesses being started in the U.S., ZenPayroll is looking at a huge potential market. Investors, including Kleiner Perkins Caufield & Byers and Google Ventures, are attracted to its formula and have invested close to $90 million in the company so far, which is now valued at just over $500 million.
John Chiala | CNBC
Joshua Reeves, CEO of ZenPayroll.
"We were frustrated with how much of a chore payroll was, full of unnecessary complexity, manual process and fees, and we started ZenPayroll to modernize the industry and transform compensation from being an impersonal transaction to a meaningful connection between employers and employees."
