Philippine HR technology platform Sprout Solutions has secured $10.7 million in Series B funding from seven prominent global venture capital firms. The round was led by Cercano Management, with participation from SoftBank Ventures Asia, AFG Partners, GSR Ventures, Integra Partners, ACA Investments, and Mynavi Corp..
The successful Series B round brings the total investment in Sprout to date to $18.3 million. This also marks the first investment by Cercano, SoftBank Ventures Asia, GSR Ventures, ACA Investments, and Mynavi Corp. in a Philippines-based company.
“Securing this funding is a testament to the hard work and dedication of our team and our commitment to providing best-in-class HR and business solutions to companies in the Philippines,” said Patrick Gentry, CEO and co–founder of Sprout. “We are excited to work with our new investors to accelerate our growth and further expand our product offerings.”
Already the leading homegrown HR tech company in the Philippines, Sprout offers HR and payroll applications and integrated solutions that streamline recruitment, employee engagement, and performance management processes. With over 1,000 corporate clients and 180,000 active users, the company is now in a unique position to become the most relevant B2B SaaS provider in the country.
“HR SaaS is mission-critical in the Philippines and the rest of Southeast Asia, where businesses are emerging and scaling very rapidly but local HR and payroll requirements remain highly complex. Sprout is a clear category leader in this space with their emphasis on technology, a comprehensive suite of solutions, and proven product-market fit. We see immense potential in the solutions they are building and are excited to join them on this journey,” said Tommy Teo, managing director and head of Southeast Asia at Cercano Management.
Sprout’s strong financial performance since its inception in 2015, along with its successful series A funding round in 2019, has paved the way for this new funding opportunity. In September 2022, Sprout also acquired Linnia, an AI and process automation platform. The acquisition strengthened Sprout’s HR ecosystem by enabling key workflow automation that simplifies people’s tasks across client organizations. Sprout is anticipated to cross $10 million in annual recurring revenue (ARR) in second quarter of 2023.
According to Harris Yang, vice-president of SoftBank Ventures Asia, “The Philippines has a highly complex labor law where employee record keeping, government compliance of payroll reporting, and employee time-keeping are major pain points. Through its localized digital HRIS, payroll, and time-keeping solutions, we believe Sprout will be the leader in HR digitization in the Philippines.”
Ivan Ong, partner at Asian fintech venture capitalist AFG, added that Sprout has demonstrated its ability to scale across companies of all sizes in the Philippines and is well-positioned to expand across Southeast Asia.
Meanwhile, Shota Sakurai, Philippines representative at Mynavi, said that as a leading HR company in Japan, Mynavi will provide its know-how and networks for the further expansion of Sprout, which has gained a lot of local support with their strengths in localization and scalability.