US PE fund Accel-KKR buys majority stake in Australian software company Humanforce

Speaking to The Australian Financial Review, Mr Pyne said the previous funds provided by Accel-KKR had helped the business increase in size to 75 engineers from 20 and to build out its product suite during COVID-19 to incorporate more elements of human capital management. Now, the focus is on expansion, with a chunk of the funds earmarked for acquisitions.

“We have a well-developed M&A pipeline, and we will move much more aggressively in terms of our inorganic strategy,” he said.

Roster-driven workforce

“We focus on the desk-less worker – the shift and roster-driven workforce – and we believe no one is owning that like we are.”

Since 2019, the company has consistently raised its software-as-a-service “bookings” by 53 per cent, and is on track to achieve 80 per cent growth in the financial year ending June 30.

Revenue, Mr Pyne said, was broadly in line with this, but slightly below because of the time it takes for utilisation from new customers to grow.

Its software has now been used by 1 million workers to set their work availability, bid on and swap shifts, apply for leave and communicate with their peers and managers. It also lets workers see how long it will take them to get to a shift, and how much they will make from their shift factoring in expenses like public transport costs.

Very resilient despite economic cycle

In the last two years the “care” sector – aged care, childcare and clinical care – has become the largest segment of Humanforce’s business, as these companies grappled with the COVID-19 pandemic.

Their soaring usage of Humanforce’s software more than offset the reductions from retail and hospitality clients.

“Workforce management, irrespective of the economic cycle, tends to be very resilient. We saw record growth in June 2020, and saw it continue to accelerate throughout the two-year period,” Mr Pyne said.

“We’ve gone from strength to strength in Australia and New Zealand, as well as in the UK. During the period we’ve also established some strong multinational customers in Asia.”

Humanforce’s customers include Regis Aged Care, Flight Centre, Accor, Secure Parking and Hoyts.

The company’s steady growth, Mr Pyne said, is partly thanks to the challenges faced by companies attempting to retain frontline workers after years of working through tough conditions.

“Since our initial investment in Humanforce in 2019, the global workforce has fundamentally shifted,” Accel-KKR managing director Joe Porten said. “Industries that are driven by a desk-less workforce have arguably been the most affected, accelerating the need for intelligent, employee-centred technology to help those businesses manage the changing landscape.”

Accel-KKR began as a partnership between venture capital royalty Accel Partners and Kohlberg Kravis Roberts in 2000, and operates independently of either company.

It operates buyout, growth capital and credit funds and has invested in more than 300 companies throughout its history.

It has made more than 15 equity investments across Australia and New Zealand. Last year it invested in field-servicing software for building compliance provider Uptick, while it sold Newcastle-based risk management software company Pegasus to US company Avetta.