Brazil‘s Sólides, an HRTech startup focused on small and medium-sized companies, received a $100 million Series B round led by Warburg Pincus, one of the world’s leading private equity investors, with more than $73 billion in assets under management and an active portfolio of more than 235 companies. According to them, this is one of the largest rounds raised by a tech company focused on human resources management in Latin America.
This is Warburg’s fourth technology-based investment in Brazil. Petz, a pet products retailer that acquired Zee.Dog last year, Take Blip, an API conversational platform, in Superlógica Group, of software for condominium management. Globally, the firm has invested in five HRTechs in the US, Europe, and China.
Since its beginning in 2015, Sólides has focused on SMEs, and not only that; it focuses on providing a full-journey HR solution for them. “At the time, many told us that this was not the right path to follow because it was usual, then, to choose one part of the journey, say recruiting or benefits management, and specialize on that. Since the beginning, though, we saw that we had to offer a complete solution to SMEs because they are usually not run by people with HR experience. They need all the support they can get to optimize their businesses. Small business professionals do not have the time or resources to invest in software that serves only part of the process. In the long run, we proved to be right, and Warburg Pincus noticed that,” Mônica Hauck, co-founder and co-CEO at Sólides, alongside Alessandro Garcia, told LABS.
“The adoption of technology by HRs is still incipient among SMEs and Sólides delivers a complete solution suited to the needs of its customers. In addition to addressing mission critical functions for customers, which leads to high retention levels, the platform enables the offering of benefits and financial products which are highly demanded by managers and employees,” said Bruno Maimone, principal at Warburg Pincus Brazil and now Sólides’ board member, in a statement to the press.
Currently, the HRTech has over 12,000 customers spread across Brazil. Sólides’ addressable market, though, is much bigger and valued at around BRL 17 billion ($3.3 billion) – there are about 600,000 companies in Brazil with 30 to 1000 employees.
The new funding will be used to further develop Sólides software solutions, aiming for portfolio expansion. “So far, we’ve been an RH software company. We now pass to a platform level, aiming to expand the offer of subsystems. Financial services, linked to benefits management, for example, and corporate education are among the areas we want to further explore,” said Hauck.
The capital will also give more breath to SoLAB – the Artificial Intelligence and Innovation Laboratory created by Sólides. “We know that this market is all about technological, IA, and big data solutions, but we always try to deliver solutions in the most usable and humane way, trying to read the ecosystem, the users, the features that they feel really comfortable about, and those they don’t. As we were born as a behavioral assessment company in the HR sector, and we built our full-journey solution looking not only to hard but also to soft skills, we managed to do that as part of our daily work.”
With its tools, Sólides promises to reduce the hiring time by up to 70%, the turnover rate by up to 50%, and increase the productivity of their customers’ HR teams by 30%.
This is the second round of investments by Sólides. The first round – of BRL 14 million – was carried out by DGF Investimentos in 2019 and paved the way for the company to compete for leadership in the national market.