Barcelona’s digital ecosystem adds a new unicorn company: Factorial, a start-up specialized in human resources software for SMEs. In the midst of an investment drought, the company has managed to enter the privileged club of companies worth more than 1,000 million.
It is a milestone for the Spanish ecosystem, led by four other unicorn companies: Wallbox and Travelperk, born in Barcelona, ??and Cabify and Jobandtalent, in Madrid. With the entry of Factorial in this club, the Catalan capital surpasses the Spanish in the number of unicorns. Historically it had always been like this, but the two cities had been tied for months because the Barcelona-based Glovo lost its valuation in the middle of this year, when the value of its parent company, Delivery Hero, sank on the stock market.
In the case of Factorial, obtaining this valuation has been thanks to the closing of a capital increase of 123 million euros. The operation has been led by the British fund Atomico with the participation of GIC and all previous investors, such as Tiger Global, CRV, K-Fund and Creandum.
“We want to be one of the global leaders in the market for digital human resources services. We believe that there is still a long way to go. Many SMEs still do not use technology for the comprehensive management of invoices, payroll or employee schedules”, he points out Jordi Romero, CEO of Factorial and co-founder of the business together with Bernat Farrero and Pau Ramon.
The company will invest the money in creating technological features and strengthening its presence in the markets where it already operates: Spain, the United Kingdom, the United States, Germany, Italy, Portugal, France, Mexico and Brazil. “We do not rule out acquisitions of competitors. The objective is to focus on the countries where we are already present because the opportunity is enormous. We now have 7,000 clients and the potential market is 10 million,” says Romero, who along with the rest of the founders will continue to lead management of the business despite having lost most of the capital.
The company was born in 2016 in Barcelona, ??although the business began to take off three years later. “We started offering the software for free and charging commissions in some services, but the model failed because it needed to attract too large a volume of clients. So we decided to change and demand a fee on a regular basis,” Romero pointed out in a recent interview in La Vanguardia .
With this new model, the company has tripled sales year after year. “In 2020 we invoiced 3 million, in 2021, we entered 10 and this year, we expect to reach 30 million”, assured the CEO, who now indicates that next year the company will triple this figure again. In terms of profitability , Factorial has never obtained annual profits and at the moment, it has no horizon in achieving them because it is focused on investing resources in growth.
One of the main areas of investment is the hiring of workers from the technological world. Currently, Factorial employs about 800 workers, divided between the Barcelona headquarters, located in the Poblenou neighborhood, and the delegations of Brazil and Mexico. Soon, the company hopes to open an office in Miami, United States.
Looking ahead, Romero hopes to keep the business independent in the private market. He considers that now is not a good time to go public and assures that the company is not for sale.
