Enterprise software has transformed the corporate world over the past two decades, creating hundreds of billions of dollars in value and reshaping how companies do business. Historically, however, small and medium-sized businesses (SMBs) have lagged larger enterprises in adopting these tools. Faced with complex and expensive products, often designed for the processes of larger organizations, many SMBs have opted to keep administrative functions manual and offline.

This is beginning to change. In 2020, SaaS revenue from SMBs is expected to more than triple its 2015 level and surpass $50B[1]. Smaller companies are taking advantage of new software developed with their needs in mind, enabling them to spend more time on core business priorities. At Accel, we have invested heavily in this trend, backing teams like Podium, Squarespace and Xero to help SMBs overhaul their sales, marketing and finance functions. A similar opportunity exists in HR, a field replete with workflows that can be made more accurate and efficient with modern software.

That’s why we are so pleased to announce our investment in Personio, the Munich-based company that has quickly established itself as a leader in European HR software. Personio has developed an HR Operating System that allows SMBs to manage processes such as employee information management, onboarding, holiday and absence management, applicant sourcing and tracking and payroll. What once required a cumbersome mix of manually-updated spreadsheets and disparate tools can now be administered through one user-friendly digital platform.

Personio has grown swiftly since its founding in 2015 and is now used by over 2,000 businesses in more than 40 countries. This growth demonstrates what can be achieved in a short amount of time by a young, ambitious team. Founders Hanno, Roman, Arseniy and Ignaz met and first worked together as students at Munich’s renowned TUM, a university with an established reputation for moulding entrepreneurs (including the founders of another company in the Accel family, Celonis).

We’ve known Hanno and his team for several years now. Over that time, we have admired the dedication and vision they have brought to building Personio, and it was an easy decision to back them as they embark on the next chapter of their company’s growth. In the years to come, Personio will expand into new countries and extend its product portfolio, building on the recent addition of its payroll product. There are at least two million European SMBs of sufficient scale to benefit from Personio’s solution, representing a market opportunity north of $30B in size, and the team is scaling and hiring to seize this opportunity.

Personio sits alongside a number of Accel portfolio companies that reflect our confidence in the SMB software market, one we expect will continue to expand over the coming years. These include PayFit, another leader in the payroll and HR space; customer engagement platform FreshWorks; site builder Webflow; and Doctolib, the operating system for medical practices. The widespread adoption of software in the SMB market has been long overdue, and Personio is set to play a key role in growing this adoption. We’re excited to be working with them to achieve that goal.

- Harry and Andrei