Human Capital Management Firm Paycor Files $100 Million IPO

Software-as-a-serve (SaaS) and human capital management (HCM) firm Paycor is looking to raise $100 million in an initial public offering (IPO) on Nasdaq under the ticker symbol PYCR, according to a Monday (April 26) press release.

Joint bookrunners on the deal included Goldman Sachs, J.P. Morgan, Jefferies, Credit Suisse, and Deutsche Bank, according to the company’s confidential filing with the Security and Exchange Commission (SEC) in February.

Paycor offers a suite of solutions for small and medium-sized businesses (SMBs) that is intended to help streamline payroll workflows and bring about regulatory compliance. The company currently works with more than 40,000 SMBs offering a range of recruiting, payroll and HR solutions.

Founded in 1990 in Cincinnati, Ohio, Paycor posted $338 million in revenue for the 12 months ended March 31, per the filing, with year-over-year growth of 13 percent. 

“The importance of people management has been elevated from a payroll-centric cost center to a highly strategic function focused on talent management as a critical component of business competitiveness,” the company said, according to the SEC filing.

The HCM shift has further been driven and reinforced by the COVID-19 pandemic, which has seen the function of human resources pivot in response to maintaining employee morale and productivity. The new demands fueled by the pandemic accelerated the transformation of HCM technology to replace manual processes, resulting in solutions offering business insights that power leaders to make data-driven decisions.

Most SMBs use legacy solutions for HCM, which typically are provided by national and regional payroll service bureaus, or by using in-house tools built on top of generic enterprise resource planning (“ERP”) systems, according to the Paycor filing. These offerings are usually complemented by advancements in cloud technology.

Paycor in January raised $270 million, led by The Qatar Investment Authority and Neuberger Berman, with participation by ClearBridge Investments, Franklin Templeton, Leumi Partners and Teca Partners.

In a PYMNTS interview last week, Dan Westgarth, COO of payroll firm Deel, said that although payroll functionality needs to adjust in accordance with new demands, there is also an opportunity to use the changes to connect with employees on a deeper level that also connecting back-office functionality.