OnPay, an Atlanta-based payroll software startup, has closed an oversubscribed $6 million Series A round from individual investors.
Mark McKee, president and COO of OnPay, said the funding will primarily be used for growing its team, product development, marketing efforts and better its customer experience.
"We’re over 50 people now and we’ll probably be at 75 by the end of the year," he said about OnPay's hiring plans.
OnPay provides cloud-based payroll, HR and benefits services to more than 10,000 clients across the country. From teams of one to 500, OnPay helps businesses across all industries and all businesses with their payroll headaches, McKee said.
"Payroll is a problem," he said. "Most entrepreneurs---it’s the first thing they deal with when they hire their first person. Unbelievably, there are people who still try to do it on Excel spreadsheets or write it by hand."
But with OnPay, businesses can finish the tedious task of filling out payroll from an easy to use platform on an iPad from their couch.
"Payroll is not fun. We’re the first ones to admit that," McKee said. "But it’s necessary. It’s a wide-ranging issue. It’s a huge need, a huge market."
The startup originally wanted to raise $5 million for its first round of venture capital, but ended up raising $1 million more than its goal from current and former business leaders, former CEOs of Fortune 1000 companies and investors in fintech, McKee said. Tony Catalfano, former CEO of Worldpay U.S., has joined OnPay’s board of directors as part of the round.
"(We raised from) people who know our space or have dealt with the (payroll) problem as an entrepreneur themselves and chose to back us," he said.
OnPay, which recently celebrated the milestone of 10,000 clients, is looking forward to scaling rapidly, keeping customer services levels high and choosing the right team members, McKee said.
"The capital raise was a big milestone for us. We’re excited for 2020 and beyond for us," he said. "The funding provides a nice foundation for growth ... 2019 was our biggest and best year ever and I think the funding caps that and brings us into bigger and better in 2020."
