In 2007, Jesse Burgess became part of his family’s payroll firm. He quickly realised that the business’s six payroll clerks were overwhelmed by tedious, repetitive tasks. To address this, he embarked on developing workflow automation tools to simplify these processes.
A few years later, Burgess identified the potential to extend these tools beyond his family’s business to a broader market. In 2011, he established OnPay, a startup dedicated to creating payroll solutions alongside software for managing HR and benefits.
Currently, OnPay offers businesses applications that aid in managing payroll deductions and taxes, team management, and the selection of health insurance, workers’ comp, and 401(k) plans for their employees. The products from OnPay are designed to integrate with a variety of third-party HR and compliance tools, allowing customers to synchronise their data across applications, including accounting information.
An increasing number of companies are opting for HR and payroll software to minimise delays caused by paperwork. According to a recent survey conducted by Business.com, 50% of HR professionals in small businesses utilise cloud-based software for managing HR tasks. Furthermore, 69% of survey respondents indicated that HR software has significantly reduced their payroll processing time, while 25% reported enhancements in legal compliance.
The global HR payroll software market valuation was approximately $23 billion in 2021, according to Allied Market Research, with projections suggesting it could exceed $55 billion by 2031.
OnPay has reaped the benefits of this expanding market. Recently, the company announced that it has secured over $100 million in new funding, which includes a $63 million Series B round led by Carrick Capital Partners. Furthermore, MC Credit Partners has provided a debt facility, details of which remain undisclosed.
Burgess noted that this funding will allow OnPay to “enhance its capabilities,” invest further in product development, and expedite its go-to-market strategy.
“This funding signifies a pivotal milestone for OnPay and is a reflection of the hard work and dedication of our team,” Burgess stated in a press release. “We are eager to broaden our offerings and drive significant growth for the businesses that depend on us for their payroll and HR needs.”
AB Private Credit Investors, known for being a middle-market private capital platform of AllianceBernstein, also contributed to the Series B funding round. To date, OnPay, which is based in Atlanta, has raised over $165 million in both equity and debt.