ZenPayroll raises seed round from the Mt. Rushmore of Valley entrepreneurs

"Needless to say, it’s a big market. One dominated by not 800 pound, but by 800,000 pound gorilla’s. ADP. Paychex. Intuit. Combined, they represent $50 billion in publicly traded market cap. They also represent slow-moving incumbents, disincentivized to pursue innovation."<p>The last sentence is why I have not added PandoDaily to my feed subscription list. The fact that they list three companies competing in a market means they are unlikely to be "disincentivized to pursue innovation." In fact, Intuit has regularly been acknowledged by the likes of Forbes[1], Inc and Fast Company and Eric Ries's Lean Startup book as being one of the most innovative public companies. Not only does it show a lack of critical thinking on the subject at hand, but it's passing that lack of knowledge onto the reader.<p>ZenPayroll is tackling a huge and highly profitable market. They're probably attacking it faster than their public counterparts. But to say a company like Intuit, along with Paychex and ADP, are not innovating because they're "disincentivized" does a disservice to ZenPayroll and its competitors.<p>I'm just guessing, but I don't think ZenPayroll takes any of its competition lightly and is working as hard as it can to break into this market precisely because it has formidable competitors.<p>[1]: Why Intuit is More Innovative Than Your Startup: <a href="http://www.forbes.com/sites/bruceupbin/2012/09/04/intuit-the-30-year-old-startup/" rel="nofollow">http://www.forbes.com/sites/bruceupbin/2012/09/04/intuit-the...</a>

I am a one-man-band with an S corp. I would love, love love it if something like ZenPayroll would help me with the 941's, state taxes, and eftps but its too hard to justify offloading that stuff at $30/mo ... $360/yr... when Bank Of America offers their kludgy software for free with my business checking account and when that fails, just manually process them.<p>It has been a constant inconvenience of mine since I incorporated myself 6 years ago.

I've been using crappy Paychex for 4 years. Sometimes their software doesn't even work in any (yes any) of the current browsers. Their support wanted me to downgrade my browser to an older version of IE9 so that I could run their software error free. Could not use Chrome, Firefox or Safari and Microsoft had moved onto IE10 at the time. Time for change. Time for disruption.

Congrats to ZenPayroll. We've been using them at Swiftype since early this year and they really do provide an excellent service. We love the fact that it's easy to use and inexpensive, but more than anything else, they've saved us countless hours by automating so many of the tedious details required to process our payroll. As a young company that is already time constrained, that has been huge for us.

We're happy ZenPayroll users. It's my first time dealing with any sort of payroll, and I haven't had to worry about it once. And the service (online + offline) is amazing.

After experiencing other kludgy payroll systems, I decided to try ZenPayroll at my current company. So far I've had zero regrets. Delightful is a high bar for payroll, but so far they've hit it for me.

I'm really curious how they're doing things such as unemployment insurance filing, local taxes, garnishments, etc.<p>This is a world that is RIPE for the taking if you can do it right, but for $154/month @ 99 employees, they should be aware they're going to blow 3 times that in support costs (for instance, how do integrate this into GL using Quickbooks? How can I set up my Vacation accrual rule for employees that isn't straight forward, etc.)

We just completed the process of switching over from Paychex to ZenPayroll. It's now clear to me why companies like Paychex should be very worried. ZenPayroll's online dashboard is orders of magnitude simpler and more intuitive than Paychex'. By automating most of the process (in lieu of a payroll specialist calling you every 2 weeks), their cost structure will enable them to always beat Paychex on price.

I create websites in my spare time, and one of my websites was generating a lot of traffic in people looking for payroll services.<p>I approached all of the major payroll companies looking for a partnership and got nothing but static. Their partnership models look like they were created sometime around 2005. Intuit, in particular, was looking for partners that were accountants. The thought that a social/content site would generate legitimate payroll leads didn't seem to track with them, even after I was showing them hard numbers of dozens of sales per month.<p>I even thought about coding up a payroll solution on my own, but the legal overhead looked like a bitch.<p>So I finally gave up. I did not find the major players to be innovative.<p>Best of luck, guys. I hope we can work together sometime. To me it looks like a field ripe for innovation. There are a lot of things you can do to really kick butt here. Look forward to seeing some cool apps (and trying them).

We currently use ADP as recommended by our first CPA, so was curious to ask our new CFO what he thought about switching to such a service. His response:<p>"There are a few small payroll companies with similar offerings. However, I have had bad experiences with self-serve payroll services and this is one of the functions that you do not want to deal with, especially when mistakes/adjustments are made. The penalties are high for non-compliance and you want the ability to have a "live" person to deal with when problems surface. In the end, I highly recommend paying for the service as the costs are not extremely high. You can save a few dollars but it is not worth it. There are so many payroll companies out there and I'm surprised the VCs are backing this one"<p>Team have thoughts on this?<p>Regardless, congrats on the fundraising.

As an employee of a company that uses ADP, I can certainly say that their software has a horrible user interface and its login authentication system is from 1996. So, having two other large payroll companies (Paychex and Intuit) certainly hasn't pushed ADP into improving their UI.

Cool product. Tough market. It will be essential to focus on small business targets. Too bad the article centred on competing with the big guys. I don't think that's where the easy money is at.<p>I'm currently in the middle of an ADP implementation for our company (120 employees), so I have a bit of insight into this. Once you reach a certain threshold of costs associated with payroll, it's very hard to beat the big players:<p>&#62;<i>"These legacy companies rely on selling to other enormous enterprise clients whose opportunity cost of switching services provides a sufficient lockin"</i><p>I don't know about this. How am I locked in? Sure, there is some labour associated with moving employee files from one provider to the next, but you have to do the same to get your data into ZenPayroll. ADP required me to fill out a spreadsheet with the required employee information. Once the data is in, you flip the switch and you're up and running on the new system. I don't see any lock-in whatsoever. I still have my employee information spreadsheet, ready to pass to the next competitor. What am I missing?<p>&#62;<i>"Faced with expensive and complex software options"</i><p>Not really complex. We worked with an ADP "implementation specialist" to design the earnings/deductions rules (customized to our specific needs), which took about a week. Now we enter hours in a text box, and adjust parameters as needed. Sure, the interface isn't pretty, but we're talking about tab-ing through text boxes and entering numbers. Can't be much more intuitive.<p>&#62;<i>"With ZenPayroll, companies can handle the standard functions of adding employee hours, overtime pay, bonuses, reimbursements, garnishments, benefits, etc., and issuing periodic payments via check or direct deposit."</i><p>This is standard for payroll systems.<p>&#62;<i>"Where ZenPayroll really sticks its head above the crowd is in the long term tracking and management for both employees and employers. On the platform..."</i><p>Standard features, at least with ADP.<p>We made the decision to switch from manual payroll to a payroll service when the cost/benefit made sense. I can understand that that threshold is far, far lower for the multitude of 1-50 employee sized businesses out there. ZenPayroll looks good there.<p>But the big players can offer something I can only assume ZP can't: support. We have two agents, ready to handle whatever crazy questions our staff has. That's vitally important to an enterprise. Although the author sees payroll as "evil", we're talking about other people's livelihood. It's not to be taken lightly. I don't see one mention of support in the article.<p>For $30/month, there's a market, and a big one. But let's not fool ourselves into thinking that the big players have nothing to offer. And they won't be easily displaced.

This is awesome. My family's small business has really been dreading automating our payroll. We use Quickbooks, and every year I swear I'm going to sign them up for Intuit's system, but every time I try, I can never figure it out.<p>So I signed up for an invite, and I'm hoping you'll let our (very) small business be a part of this! We have less than 5 employees, and we're in Fremont, CA.<p>One question: how easy would it be to get the data for each transaction into accounting software like Quickbooks?

Congrats to ZenPayroll!<p>Side note: Since when is $6.1M a seed round?

Extremely well-deserved! We use ZenPayroll over at <a href="http://collections.me" rel="nofollow">http://collections.me</a> and it 100% lives up to the hype. It's going to be a true pleasure watching it grow into a titan of the industry.

We're Zen Payroll users and have had a terrific experience with them. Their support is amazing. I have no doubt they can and will take on the big players successfully.

Sounds coo but as a small business owner who uses online payroll I could care less whether this is "cloud based" - what will this do better than Intuit online?

No native mobile app (which is a good thing). Looks like "mobile first" is no longer a requirement to land a big seed round.

Does ZenPayroll offer time tracking? The company I work at uses SpringAhead to enter time sheets and Paychex for payroll.

Congrats Eddy and co!

I hope one day I have to use this : )

Wish i could down vote this. Seems to be written like an ad.

rock on guys.

Article says direct sales doesn't make economic sense in this market. ADP employs an army of well payed outside sales reps. I interviewed there out of college. Seemed like a good job. What's the difference between the businesses that ZP can't support that long term?<p>I know tech companies hate that and want to automate everything, but some products need sales reps.