Toronto-based Humi has been acquired by fellow HR software company Employment Hero, as the embattled Australian company looks to gain a foothold in Canada.
In a statement, Humi said the deal is “estimated to be worth north of $100 million CAD.” However, sources close to the company indicated to BetaKit that the acquisition was worth $155 million CAD.
“In a lot of ways, the partnership with Employment Hero is like a better version of a Series C for us.”
Kevin Kliman
Humi
In an interview with BetaKit, Humi co-founder and CEO Kevin Kliman declined to disclose the exact purchase price, but said the acquisition was made with a mix of cash and equity.
Following the acquisition, Kliman said that Humi will become the Canadian hub for Employment Hero, while remaining branded as Humi for the time being. He added that the combined company plans to retain all of its current employees and materially grow its presence in Canada.
“In a lot of ways, the partnership with Employment Hero is like a better version of a Series C for us,” Kliman said. “We get the funding that we otherwise would have gotten to grow the next stage of our company, incredible mentorship from a team that has just done what we want to do, and all the leadership within Humi is staying in place.”
Founded in 2016 as a cloud-based web app to store employee data, Humi has since expanded to support employers in managing HR, benefits, and payroll. The startup raised a $15-million CAD Series A round led by Tribe Capital in 2020 and a $31-million CAD Series B round led by Kensington Capital Partners in 2022.
Kliman claimed in a blog post announcing the deal that more than 150,000 Canadian workers are using Humi, and that the platform has facilitated over $7 billion in wages to date.
Employment Hero offers many of the same HR features as Humi, but both platforms will benefit from filling their respective gaps, according to Kliman. He said that Humi will bring the local knowledge and features that are required to support Canadian companies to Employment Hero, while Humi will benefit from Employment Hero’s five-year head start in the space, allowing it to “leapfrog” its less mature onboarding, recruiting, and payroll tools.
Kliman added that he felt like the culture fit of the two founder-led companies “could not be better.”
“Humi’s mission is to become the largest employment platform in Canada, while Employment Hero’s mission has become the biggest employment platform in the world,” Kliman said. “So the two are very well matched in mission and in culture.”
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Despite this sentiment, Employment Hero has been under fire from the Australian press on multiple fronts over the past few months, principally with allegations of a toxic workplace culture.
In October, Australian publication Capital Brief reported that Employment Hero co-founder and CEO Ben Thompson was facing criticism from women leaders in Australia’s startup scene for a post made on X that said: “WiseTech CEO Richard White is allegedly bringing a whole new meaning to the term ‘seed capital.’”
The post, which Capital Brief reported that Thompson downplayed as a “bad dad joke,” referred to allegations that White had expectations of sexual favours in exchange for business investment, and had been sending crude and suggestive messages to female entrepreneurs.
In the ensuing months, Capital Brief reported numerous stories on Employment Hero’s allegedly toxic workplace culture, including a rowdy offsite gathering that resulted in the termination of four employees, with multiple former employees describing the company as a “vile workplace” ruled by a “fear culture.” Current and former staff also complained to the outlet about Employment Hero’s series of abrupt strategy changes in the past few months, including scaling back an expansion, pausing development on several projects, and making layoffs.
Kliman said he disagreed with the reports, and that he had “spent time with tons of people on [Employment Hero’s] end.”
“I can say for certain that the culture is fantastic, they’re incredibly caring people and treat people as such,” Kliman said. “The culture within the company has been nothing but positive from what I’ve seen.”
Feature image courtesy Humi.