KKR Acquires Stake in HRM Platform Employment Hero from SEEK Investments

KKR, a leading global investment firm, has announced its acquisition of a stake in Employment Hero, a leading employment management platform, from SEEK Investments. The deal, which is expected to be completed by the first quarter of 2025, marks KKR's latest technology growth investment in Australia through its Asia Next Generation strategy.

Employment Hero, founded in 2014, provides end-to-end human resources management, payroll, recruitment, and employee engagement tools covering every stage of the employee lifecycle. The platform has grown its footprint to serve more than 300,000 small and medium-sized enterprises (SMEs) globally, with a strong presence in Australia, the UK, and Canada.

Mukul Chawla, Partner and Head of Asia Pacific Growth Equity at KKR, commented on the investment, "Employment Hero marks our latest technology growth investment in Australia, a key market for our growth equity strategy, and aligns with our thematic focus on SMB (small and medium business) software. We look forward to supporting the continued platformisation and international expansion of Employment Hero, which has established itself as a leader in human resources management in multiple markets with its cloud-native and comprehensive product suite."

For Employment Hero, KKR's investment builds on its strong growth momentum and follows its acquisition of leading Canadian employment platform Humi in January. The company has also surpassed A$250 million in annual recurring revenue (ARR), signaling the growing customer demand for its Jobs, Payroll, HR, and Benefits products.

Ben Thompson, CEO and Co-Founder at Employment Hero, expressed his enthusiasm about the partnership with KKR, "Employment Hero's mission is to make employment easier and more valuable for everyone. Over 300,000 businesses globally are using our employment operating system, helping boost job creation for local economies and GDP globally. Our recent milestone of A$250 million in annual recurring revenue also signals the growing customer demand for our Jobs, Payroll, HR, and Benefits products to drive better business outcomes. KKR's significant experience, resources, and network will be extremely valuable in our efforts, particularly as we look to further develop our international footprint. We welcome KKR as a strategic partner and look forward to our close collaboration with them over the long term."

Andrew Bassat, Executive Chairman and CEO of SEEK Investments, also commented on the transaction, "The SEEK Growth Fund has been a long-term investor and supporter of Employment Hero. We retain our high conviction towards Employment Hero's strategy and outlook. We look forward to continuing our partnership with Ben and working with KKR to help Employment Hero realise its full potential."

The acquisition of a stake in Employment Hero by KKR represents more than just a capital injection; it's a strategic positioning in the rapidly evolving HR tech landscape. The deal's timing, following Employment Hero's acquisition of Humi, suggests a sequential expansion strategy backed by KKR's extensive resources and network. This could accelerate Employment Hero's international growth trajectory, particularly in the Asia-Pacific region where KKR has demonstrated success with similar B2B SaaS investments like SmartHR in Japan and KiotViet in Vietnam.

The retention of SEEK Growth Fund as a material investor creates an optimal ownership structure, combining SEEK's deep understanding of the employment sector with KKR's global technology scaling expertise. This partnership structure could provide Employment Hero with significant competitive advantages in product development and market expansion, particularly important as the HR tech sector continues to consolidate and mature.

Employment Hero's end-to-end platform approach, covering the complete employee lifecycle, positions it well in a market where integrated solutions are increasingly preferred over point solutions. Their focus on SMEs, traditionally an underserved market segment in terms of sophisticated HR technology, provides substantial growth runway, especially in emerging markets where SME digitalization is accelerating.

In conclusion, KKR's acquisition of a stake in Employment Hero from SEEK Investments is a strategic move that aligns with Employment Hero's growth trajectory and market potential in the HR tech sector. The investment, backed by KKR's extensive experience, resources, and network, is poised to accelerate Employment Hero's international expansion and platform development, ultimately driving growth and value creation for both parties.