Factorial explores new funding at a reported $2B valuation
Barcelona-based HR software startup Factorial is in early discussions with investors about a new funding round that could raise as much as $200 million and potentially lift its valuation to around $2 billion, according to Bloomberg. People familiar with the matter said the size of the round and the final valuation have not been finalized.
If completed at the reported level, the deal would mark a major step up for Factorial, which was last valued at $1 billion in 2022, and could make it one of the most valuable startups in Spain.
Momentum built on ARR milestone and prior non-dilutive capital
Factorial, founded in 2016, sells a single platform that helps businesses manage core HR workflows including employee leave, payroll, recruitment, and training. The company said it reached annual recurring revenue (ARR) of $100 million in September, a key SaaS benchmark often used to gauge scale and revenue durability.
Last year, the startup also secured a non-dilutive $120 million financing package from General Catalyst to accelerate HR-focused sales and marketing efforts. That earlier structure allowed the company to fund growth without issuing new equity, underscoring investor appetite for efficient, recurring-revenue software businesses.
HR tech competition intensifies amid automation and AI
The potential raise comes as investors continue to back platforms that automate HR administration and help companies manage expanding workforces more efficiently. Demand for HR software accelerated during the COVID-19 period, when remote and distributed work increased the need for digital systems of record.
The market is also shifting as artificial intelligence begins to take on routine administrative tasks once handled manually. Competition remains fierce, with fast-growing players such as Deel and Rippling vying for market share while also being embroiled in ongoing legal disputes, highlighting both the sector’s growth and its rising stakes.
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