Justworks Cites Market Conditions for US IPO Delay

Justworks Inc. is delaying its U.S. initial public offering (IPO) because of market conditions, Reuters reported Wednesday (Jan. 12), squelching plans to sell 7 million shares between $29 and $32 and rake in up to $224 million, per a filing earlier this month.

More than 60% of companies that went public last year are trading below their IPO price, according to the report, which cited data from Refinitiv.

Justworks’ scalable cloud-based platform enables human resources leaders at small- to medium-sized businesses (SMBs) to handle payroll, benefits and compliance. The company acquired Boomr, which automates employee work hour tracking, in 2020 after launching in 2012, the report stated.

The company was planning to list on Nasdaq under the ticker symbol JW, according to the report. Goldman Sachs, J.P.Morgan Chase and Bank of America were the lead underwriters for the Justworks IPO, according to the report.

In a letter in its filing to the Securities and Exchange Commission (SEC), Justworks Founder and CEO Isaac Oates said he started the company to help entrepreneurs reach their full potential by allowing them to concentrate on their businesses while having Justworks handle human capital management.

Read more: SMB HR, Payroll Startup Justworks Readies for IPO at $2B Valuation

New York-based Justworks has more than 8,000 customers in all 50 states, representing close to 140,000 worksite employees. For the last fiscal year, Justworks had a subscription revenue net retention rate of 117%, according to the prospectus. Total revenue for the fiscal year ending in May was $982.7 million compared to 2020’s revenue of $742.4 million, up 32.4% year-over-year.

Meanwhile, Paris-based SMB-focused payroll and human resources management PayFit announced last week that it has raised 254 million euros ($276 million).

See more: PayFit Raises $276M to Transform HR Technology

PayFit will use the fresh capital to recruit more staff, accelerate the development of innovative new products and boost its market share in Europe. The company plans to scale up from more than 700 employees to more than 1,000 within the next year.