Justworks Files to Take Its SMB-Focused, HR-Themed SaaS Business Public

Justworks Files to Take Its SMB-Focused, HR-Themed SaaS Business Public

The IPO cohort for early 2022 is starting to take form. Reddit just filed to go public but in a confidential manner. This is going to be a big debut. We could be content with Samsara wrapping up 2021 and Reddit promising pyrotechnics. However, there will be additional products in the future, including Justworks: We will look at the HR software company’s S-1 to see what it has developed after it filed late last week.

Justworks has been reported by TechCrunch on multiple occasions, notably when it received a $40 million round in 2018. As the year began, the former company also closed a $50 million round, bringing its total funding raised to slightly over $140 million. In addition, earlier this year, Justworks CEO Isaac Oates sat down with one of his investors and TechCrunch to go over the 2018 Series B presentation deck. Our notes may be found here.

For example, when company Blink secured $20 million at a $100 million valuation, we covered the Justworks category more extensively. HR software geared at non-tech organizations was having a moment at the time, according to our own Ingrid Lunden. Today, we will look at Justworks’ operations, financial performance, and potential value. Let us have one final round of IPO fun this year!

Justworks’ software aids in the smooth operation of small enterprises. What is on the menu? Payroll, vendor payments, payroll tax filings, unemployment insurance, accounting software, and e-signature support are all things that need to take care of.

A smorgasbord of tools that, even at lower pricing tiers, enables SMBs to focus on their core competencies, more pricey plans with access to health insurance goods is also available from the tech business. Justworks offers its software on a per-employee, per-month basis, with predetermined prices for organizations with up to 175 workers; beyond that, you will have to call them. Therefore, HR-focused SaaS for SMBs. Justworks’ categorisation helps us figure out what questions to ask:

  • Is Justworks just a software firm, or does its offering need additional human involvement, lowering its gross-margin profile? (To put it another way, how good is its revenue?)
  • Is churn in the firm under control? (To put it another way, SMB consumers as churn-prone as venture investors have told us in the past)
  • Finally, do Justworks’ net retention figures look appealing? (To put it another way, if you charge per worker, how far can you upsell clients with restricted employee footprints?)

However, this is not your typical software IPO. Software revenue and a large portion of low-margin insurance and benefits coverage make up the company’s revenue mix. In addition, Justworks has a profitable record of accomplishment that we do not see very frequently.

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