Armed with yet another technology offering aimed at letting employers downsize internal human resources departments, Synhrgy HR Technologies Inc. recently wrapped up the final piece of its $25 million Series B financing. The deal’s initial $15 million was raised in February, with an additional million coming through in March. The remainder was drawn down earlier this month as Synhrgy converted a $9 million bridge loan secured late last year.
“We were originally looking a little higher, but in the end we realized all we needed on a cash-flow basis was $25 million to get us to EBITDA positive [by the end of the third quarter],” said Michael Mackey, chief financial officer with Synhrgy.
UnitedHealth Group Corp. led the second round transaction, and was joined by fellow existing investors Richland Ventures, Validus Partners and new player T. Rowe Price. The deal was sold with a post-money valuation of $95 million, up significantly from the $25 million post-money mark granted as part of the Houston-based issuer’s $12 million Series A deal.
“They probably could have brought in some other new people, but there was some time pressure to get [the deal] done because the management didn’t want or need the distraction and the money was already sitting around the table,” said Bernie McDonagh, chief executive of UnitedHealth Capital. “It was really a matter of convenience.”
Synhrgy offers enterprise customers an opportunity to outsource many of their HR needs through both integrated high-tech and low-tech offerings. For Web-dominated firms, Synhrgy has products that can help provide such services as employee benefit information, workforce administration compliance and workforce development. It also offers live telephone call centers for customers whose employees are less Web active.
Synhrgy has no current plans for an additional financing round, but is open to possible strategic partnerships.
Contact Dan Primack at Daniel.Primack@tfn.com