As a wave of tech-led innovation makes its way through human resources departments, investors are pouring dollars into the rapidly growing market of HR tech. While everything from job recruiting to interviewing to workforce management is ripe for change, a large number of startups are targeting the large corporate payroll software incumbents and the related services they offer (whether to enterprises or SMBs – small and medium size businesses).
One of these giant payroll software vendors is Paychex. Paychex was founded in 1971 and went public in 1983. Over thirty years later, the Penfield, NY-based company has grown its market cap to nearly $20 billion with myriad services extending into business accounting, 401k administration and health insurance offerings. Paychex competes directly with the likes of ADP, Insperity and TriNet but also with the likes of Intuit and the UK’s Sage Group in certain areas.
Now a host of emerging startups are attacking the various products and services that Paychex offers, including its bread and butter – payroll services. Many of the startups attacking Paychex and other incumbents are focusing on small and medium-sized businesses (SMBs) and hoping to grow with them. These include companies such as ZenPayroll, which recently raised $60M in fresh funds at a $560M valuation and Zenefits, which provides an all-in-one suite for HR and benefits in the cloud and is rumored to be raising a new round at a valuation higher than $3B joining the rapidly expanding unicorn club – private companies worth over $1 billion.
The graphic below shows the homepage of the Paychex website and the startups going after its individual parts ranging from ZenPayroll, Namely and Justworks in payroll tech to Bench, FreshBooks and Wave in SMB accounting and Replicon and Humanity in time tracking. Click the graphic to expand.
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