Justworks files to take its SMB-focused, HR-themed SaaS business public

The IPO cohort is beginning to take shape. It was recently filed to go public. That is going to be a big deal.

We might be content with the closing of Samsara in 2021. We are going to tear into the company's S-1 to see what the company has built.

Money, markets and startups are explored by the Exchange.

You can read it every morning on The Exchange.

Justworks raised a $40 million round in the fall of 2018, and has been covered by the tech site several times. As 2020 began, the former startup closed a $50 million round, bringing its total known capital raised to over 140 million dollars. In addition, Justworks CEO Isaac Oates sat down with one of his investors to go over his Series B pitch deck. Here you can find our notes.

We have reported on the Justworks category more broadly, for example, when startup Blink raised $20 million at a $100 million valuation. HR software aimed at non-tech companies was having a moment at the time, as noted by our own Ingrid Lunden.

We will look at Justworks business, its economic performance and what it might be worth today. Let's have a little IPO fun this year.

What is a 'Justworks'?

Small businesses use Justworks software to keep things running. What is on offer? Payroll, vendor payments, payroll tax, unemployment insurance, accounting software, and e-signature support are some of the things.

The core work of being in business can be done with a grab bag of tooling. The tech company has plans that are more expensive.

Justworks sells its software on a per-employee, per-month basis, with set costs for companies up to 175 employees, and the company wants you to call them.

So, HR-themed software. We know what questions to ask thanks to the classification of Justworks.

Is Justworks a pure software company, or is it a product that requires more human inputs? How high-quality is its revenue?
Does the company have a good handle on it? Is it possible that we have been warned before that the SMB customers are as Churn-Heavy as we have been?
Does Justworks have attractive net retention metrics? If you charge per worker, how far can you increase the number of customers?

Let's see what we can find.

Is it a good business?

Yes? It is not a traditional software IPO.

Software income and low-margin insurance and benefits coverage make up the company's revenue mix. Justworks has a history of profitability that we don't see often.