Yet in the past five months alone, ZenPayroll has gone from processing paychecks at a rate of $100 million to $400 million annually. The staggering growth suggests there is plenty of demand among small businesses for its easy-to-use payroll services.
The growth is also a reason why investors like Kleiner Perkins Caufield & Byers and General Catalyst Partners are sinking $20 million into ZenPayroll.
"We're stepping on the gas pedal," says Joshua Reeves, the co-founder and CEO of ZenPayroll. Currently, the company operates in just seven states, and Reeves says it plans to expand aggressively.
ZenPayroll has had what in Silicon Valley is considered as something of a charmed life. It was admitted to the Y Combinator program for the January 2012 session. Shortly after graduating in April of that year, it raised a seed round of $6.1 million, a full eight months before it even launched its product. At the time, Reeves and his co-founders insisted on getting financing only from entrepreneurs who had grown their companies from scratch. They put together a syndicate that included an enviable list of investors that included the CEOs of Yelp, Box, Dropbox, and Yammer, among others.
While its bigger competitors in the payroll world are mostly focused on large businesses, ZenPayroll has developed a simple web-based platform that has appealed to bakeries, law firms, flower shops, hotels, dentist offices, restaurants, and other small businesses. It charges those businesses a $25 flat fee, and an additional $4 per employee for the first 10 employees, and $2 per employee after that.
"Small businesses in particular have struggled with doing payroll manually or using overly complex, expensive software," Randy Komisar, a partner at Kleiner Perkins said in a statement. "ZenPayroll is transforming compensation from the unloved, bureaucratic process it is today, to an opportunity to improve the employer and employee relationship."
As part of its effort to reimagine payroll, the company has focused as much on the employee as on the employer. An employee who joins a ZenPayroll customer will "on-board" themselves, entering their bank information and other credentials. The website will give them easy, graphical access to information like upcoming pay dates and payroll history. The user's account is meant to be for life, so when they switch employers, they will continue to have access to past records, and be able to see their earnings over the length of their career.
The company has also developed a set of programming interfaces that allow businesses to tie their payroll processing with their expense reporting or human resources management systems. "The broader message is that there is an ecosystem of modern companies that are trying to make it easier to run a small office," says Reeves, who is turning 31 on Wednesday.
Reeves' entrepreneurial career started at Stanford, during what came to be known as the "Facebook class," a fall 2007 course in which students were taught to build apps for Facebook's then-new platform. Several students in the class turned their apps, which in some cases made tens of thousands of dollars a month before the academic quarter was over, into companies. Reeves' own app earned him enough cash to quit his job in 2008 and develop Buzzeo, a content management system for Facebook (FB). Two years later, he sold the company to a firm called Context Optional. Since then, Context Optional has been acquired by Efficient Frontier, a digital marketing firm, which in turn was acquired by Adobe (ADBE).
Reeves now says he's done starting companies. "I want to spend the next few decades building this one," he says.
Newspapers and news television shows are to blame for the venture capitalist's controversial views -- which means they are working exactly as intended.
FORTUNE -- It is immutably true that to a hammer everything looks like a nail. To me these days, every conversation devolves into a lesson about the power of media.
Much ink has been spilled -- and yes, I mean for you to ponder my metaphor for at least MOREAdam Lashinsky, Sr. Editor at Large - Feb 18, 2014 2:15 PM ET
A princely sum goes to the company with a mission to teach the world a new language.
FORTUNE -- Duolingo, the company and free application that teaches people languages through game-like activities, announced on Tuesday that it raised $20 million in a funding round led by the Silicon Valley venture capital firm Kleiner Perkins Caufield & Byers.
The service, which launched in 2012, is now used by 20 million people, 10 million of MOREChanelle Bessette - Feb 18, 2014 11:00 AM ET
Early on, the IDEO veteran saw the potential in a "green" company that understood consumers.
FORTUNE -- Among the happiest of the investors behind Google's (GOOG) move to buy Nest Labs for $3.2 billion earlier this week is the venture capital firm Kleiner Perkins Caufield & Byers, which is believed to be the company's largest outside shareholder. The deal will likely return the firm 20 times its original investment, a win for MOREJessi Hempel, writer - Jan 16, 2014 3:22 PM ET
The Kleiner Perkins partner discusses the concepts of deep learning, deep empathy and deep experience.
FORTUNE -- Mike Abbott is a partner at Kleiner Perkins Caufield & Byers, a venture capital firm. As the former vice president of engineering at Twitter, he brought his experience to the firm in 2011 and now focuses on digital investments. He has a bachelor's degree in biochemistry from California Polytechnic State University and has completed coursework MOREChanelle Bessette - Nov 6, 2013 3:05 PM ET
Hot interior design startup didn't have the usual beginnings.
By Colleen Leahey, reporter
FORTUNE -- Adi Tatarko planned big things for her Silicon Valley ranch-style house. But making them a reality proved an expensive -- and miserable -- experience. Tatarko's friends described similar frustrations while renovating their homes, so she and her husband Alon Cohen began developing what would eventually become startup Houzz. Cohen understood the mutual need between buyers and sellers MOREMay 31, 2013 5:00 AM ET
Apple figured prominently in the Queen of the Net's 2013 presentation of industry trends.
FORTUNE -- If you don't have 23 minutes to watch the video of Mary Meeker's state-of-the-Internet report at AllThingsD 2013 -- or if you just want a chance to study more closely slides that she showed for an average of 14 seconds each -- here are the 10 that pertained to Apple (AAPL).
They covered everything from the MOREPhilip Elmer-DeWitt - May 30, 2013 7:20 AM ET
There is still lots of room to grow in mobile, says one of the world's top Internet analysts in her annual report.
FORTUNE -- Mary Meeker's annual Internet Trends report is a little like Cokie Roberts's Monday morning appearances on NPR -- a litany of points of unsurprising conventional wisdom.
That doesn't make it valueless: Like Roberts's weekly reports, Meeker's annual presentations put a lot of disparate information in context and offer MOREDan Mitchell, contributor - May 30, 2013 6:48 AM ET
This AdMob vet wants to bridge the divide between desktop and mobile advertising. If she succeeds, even Google could find itself at a disadvantage.
FORTUNE -- Kamakshi Sivaramakrishnan never planned to go into advertising, much less run a startup. But when the 37-year-old Stanford graduate, with a Ph.D. in Information Theory, met AdMob founder Omar Hamoui, she turned her back on Wall Street and joined AdMob as a research scientist in MOREJP Mangalindan, Writer - May 21, 2013 7:58 AM ET
Three of the Bay Area's marquee investment firms want to capture the most interesting ideas before they're hatched.
FORTUNE -- It was classic Sergey Brin. Dressed in sports shorts, an exercise shirt and blue Crocs, the Google co-founder showed up riding an elliptical bicycle, and as he does these days, wearing Glass, Google's futuristic wearable computer that fits on a head mounted display. Oh, and he was a few minutes late.
The MOREMiguel Helft, senior writer - Apr 10, 2013 5:00 PM ET
|GM's recalled Cobalt was a failure from the start|
|Michaels hack hit 3 million|
|Walmart offers cheaper money wire service|
|Why you should pay off your car loan ASAP|
|Americans have fallen in love with real estate once again|